How Are Alternative Holidays Valued Compared To Annual Holidays?

Alternative holidays (also called "days in lieu") are valued in days, not weeks, and use a different formula from annual holidays. Lightning Payroll picks between Relevant Daily Pay and Average Daily Pay when paying one out.

Relevant Daily Pay (RDP)

• The amount the employee would have earned if they had worked the day.
• Used when it is clear from the work pattern what the employee would have been paid - e.g. a salaried employee on a fixed schedule.
• Includes the regular daily wage plus any productivity payments or commissions for the day.

Average Daily Pay (ADP)

• Calculated as gross earnings over the last 52 weeks divided by the number of days worked in that period.
• Used when RDP cannot be determined - e.g. variable hours, casuals, or commission-heavy roles.

Which one Lightning Payroll uses

• If the employee's ordinary hours per day are set and the work pattern is clear, RDP is used.
• If the daily figure cannot be derived from ordinary hours, ADP is used.
• The chosen method and rate are shown in the valuation note on the leave taken dialog and on the termination wizard.

Differences from annual holidays

• Annual holidays use a weekly rate (AWE or OWP); alternative holidays use a daily rate (RDP or ADP).
• Annual holidays accrue automatically on anniversary; alternative holidays are granted only when an employee works a public holiday on what would have been an otherwise working day.
• Alternative holidays do not expire but can be cashed up after 12 months if both employer and employee agree.