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Free PAYG Holiday Pay (8%) Calculator for New Zealanders

Fixed-term workers under 12 months and true casual workers in NZ can be paid holiday pay as 8% on top of gross earnings each pay (pay-as-you-go) instead of accruing weeks of leave.

Your earnings

$25,000
$
$1k$200k
8% holiday pay
$2,000
Pay-as-you-go component

Based on $25,000 in gross earnings over the period.

Gross earnings$25,000
8% holiday pay loading$2,000
Total earnings + holiday pay$27,000

About our PAYG Holiday Pay Calculator

The 8% PAYG methodPAYG holiday payHoliday pay paid out as 8% of gross earnings each pay run, instead of accruing leave.View in glossary → packages annual leave entitlement into each pay run rather than accruing it as time off. For a casual barista on $448 a week, the 8% adds $35.84 to each pay, totalling about $1,860 a year on top of the regular wage.

How to use it

Enter the gross weekly or fortnightly pay. The calculator returns the 8% PAYG holiday-pay component, the new combined gross, and the after-tax landing figure.

Why use it

For employers checking whether the 8% is being applied correctly, and for workers wanting to verify the figure on their pay slip. The 8% is a flat percentage; the per-pay calculation is straightforward.

The maths behind it

Formula: PAYG holiday pay = 8% × Gross earnings

NZ’s 8% figure represents 4 weeks of annual leave divided across the working year (4 ÷ 52 = 7.69%, rounded up to 8%). Eligible workers (fixed-term less than 12 months, or "true casual" with no regular pattern) receive 8% added to each gross pay, in lieu of accruing leave. The 8% is itself subject to PAYE, ACC, KiwiSaver, and student loan deductions before reaching the worker.

Worked example

Phoebe, casual barista in Kerikeri, working 18 hours a week at $24.90/hour.

Phoebe’s weekly gross earnings: 18 × $24.90 = $448. PAYG holiday pay added: $448 × 8% = $35.84/week.

Combined gross weekly: $483.84. PAYE on $483.84 (annualised at $25,160 sits in the M-code 17.5% bracket): roughly $48. ACC: $8.50. KiwiSaver (if elected at 3.5%): $17.

Net per week: about $410. Over a 12-month casual year of similar weeks, the 8% holiday pay adds about $1,860 of extra gross income compared to a worker who accrued leave instead.

Things to keep in mind

  • Eligibility is narrow. PAYG (8% method) only applies to fixed-term contracts under 12 months OR "true casual" workers (no regular work pattern). Permanent employees must accrue leave; using PAYG for permanent staff is unlawful under the Holidays Act 2003.
  • Casual classification has tests. The "true casual" test looks at whether work follows a regular pattern, has reasonable expectation of continuing, and includes mutual obligation. Many "casual" workers in NZ would meet a Holidays Act review as actually being permanent, which makes PAYG unlawful for them.
  • PAYG includes everything. The 8% covers all annual-leave entitlement: 4 weeks per year, including holiday pay accrual. It does not cover sick leave, bereavement leave, or family violence leave, which casual workers may still be entitled to under separate rules.
  • KiwiSaver and other deductions still apply. The 8% is gross income, subject to PAYE, ACC earner levy, KiwiSaver employee contribution (if elected), and student loan (if SL-coded). It is not a separate "tax-free" payment.

NZ-specific notes

Employment NZ
PAYG holiday pay rules. Section 28 of the Holidays Act 2003 sets out who can be paid PAYG: fixed-term workers under 12 months, and "true casual" workers without a regular pattern.
Source
IRD
PAYE on PAYG holiday pay. The 8% is gross income subject to PAYE the same as ordinary wages. No special tax treatment applies.
Source
MBIE
Holidays Act review. The Ministry of Business, Innovation and Employment has consulted on Holidays Act reform; the 2024 task force recommendations are public but not yet legislated.
Source
Employment NZ
Casual vs permanent status. Many "casual" workers in NZ would meet a status test as actually permanent, in which case PAYG is unlawful. The Employment NZ guidance covers the test.
Source

FAQs

Why 8%?

4 weeks of leave divided by 48 working weeks (52 - 4 = 48) is 8.33%, rounded down to 8%. The 8% covers a worker’s annual-leave entitlement under the Holidays Act 2003.

Can my permanent job pay 8%?

No. PAYG is only lawful for fixed-term workers under 12 months or "true casual" workers. Permanent employees must accrue annual leave and be paid at the OWP/AWE rate when leave is taken.

Is 8% on top of my hourly rate?

Yes. PAYG holiday pay is 8% added to gross earnings each pay run. If you negotiate a $26 hourly rate "including holiday pay", the headline number embeds the 8%; check the contract for clarity.

Do I still get sick leave?

Casual workers are entitled to sick leave once they meet the test of having worked at least 6 months, averaging 10+ hours/week. Bereavement and family violence leave may also apply.

References & sources

  1. Employment NZ, "Cashing up annual holidays". employment.govt.nz
  2. Inland Revenue, "Payday filing". ird.govt.nz
  3. Ministry of Business, Innovation and Employment, "Employment legislation reviews". mbie.govt.nz
  4. Employment NZ, "Casual employees". employment.govt.nz

Last reviewed

✓
Reviewed 6 May 2026, current to the Holidays Act 2003 PAYG provisions

Share your numbers

Tax & Pay Holiday Pay (accrued) OWP/AWE method for permanent workers. Tax & Pay Annual Leave Days accrued per year of work. Tax & Pay Sick Leave 10 days per year for eligible workers. Tax & Pay Public Holiday Pay Time-and-a-half plus day in lieu. Tax & Pay Take-Home Pay After-tax view of all earnings. Tax & Pay Final Pay Final-pay accrued leave at termination.
Disclaimer: This calculator is for information only and is not financial advice. Whether PAYG is lawful for a specific worker depends on the casual or fixed-term test. Calculator.org.nz is not a registered Financial Advice Provider. For employment-status disputes, contact Employment NZ.