How Does Pay-As-You-Go Holiday Pay Work In A Final Pay?

For an employee who is correctly on pay-as-you-go holiday pay, the final pay still needs a careful review. The pay-as-you-go holiday amount should be based on the relevant earnings for the final pay period, but it should not create a second 8% calculation on termination lump sums that are not part of the pay-as-you-go holiday base.

1. Open the final pay and review ordinary final wages first.
2. Check termination payments, unused Alternative Holiday payouts, redundancy, payment in lieu of notice, and any other final-pay lump sums separately.
3. Confirm the pay-as-you-go holiday amount is based on the correct earnings and has not been calculated again on top of the termination payouts.
4. Review PAYE, KiwiSaver, student loan, and other deductions before completing the pay.

If the employee was not genuinely eligible for pay-as-you-go holiday pay, handle that as a remediation or entitlement correction. The employee may still be entitled to normal Annual Holidays despite receiving 8% in earlier pays.