Employment Leave Act cost calculator: your team from 6 August 2028
From 6 August 2028, the Employment Leave Act 2026 builds annual leave at 0.0769 of an hour and sick leave at 0.0385 of an hour for each standard hour, and adds a payment of at least 12.5% of the ordinary hourly rate on every casual and additional hour. Enter your team's hours to see the leave it builds and the payments, against today's rules.
Worked out for the example. Change the boxes to make it yours.
| Each week, each person on 37.5 hours builds | 2.88 hours annual, 1.44 hours sick |
|---|---|
| Annual leave a year, all 10 staff, today (4 weeks each) | 1,500 hours |
| Annual leave a year, all 10 staff, from 6 August 2028 | 1,499.55 hours |
| Sick leave a year, all 10 staff, today (10 days each, after 6 months) | 750 hours |
| Sick leave a year, all 10 staff, from 6 August 2028 (from day one) | 750.75 hours |
| Additional hours a year (12 hours a week at $30.00) | 624 hours |
| Today: no separate payment | $0 |
| From 6 August 2028: 12.5% leave compensation payment | $2,340 |
| Casual hours a year (60 hours a week at $26.00) | 3,120 hours |
| Today: 8% holiday pay as they go | $6,490 |
| From 6 August 2028: 12.5% leave compensation payment | $10,140 |
| Leave compensation payments a year from 6 August 2028 | $12,480 |
| Compared with today's holiday pay on the same hours | $5,990 more |
- Leave hours are worked over 52 weeks, because hours on paid leave count as standard hours under the new Act. On a regular five-day week, annual and sick leave come out about the same as today; the money moves in the payments on additional and casual hours.
- The 12.5% is on the ordinary hourly rate only. Today's 8% is on gross earnings, which include penal rates and allowances, so with those the gap is smaller than shown.
- Additional hours can raise annual holiday pay today through average weekly earnings. From 2028 leave is paid at the leave hourly rate, which leaves overtime out, so part of the new payment replaces that.
Team timesheets shows the hours staff choose to share, by person, project and task, and who has not logged this week, with a CSV ready for payroll, optional approvals and your own billable rates. It never reads the pay or rates in anyone's own account, and has no rosters.
See Team timesheetsWhat changes on 6 August 2028
The Employment Leave Act 2026 replaces the Holidays Act 2003 on 6 August 2028. Until then the Holidays Act applies, and Employment New Zealand says you cannot follow the new rules early. Each employee already working for you moves across from their first pay period that starts on or after that date. Annual leave stops being 4 weeks after each 12 months: it builds from the first day at not less than 0.0769 of an hour for each standard hour (section 24). Sick leave builds at 0.0385 of an hour for each standard hour (section 73), up to 160 hours unless you agree to more (section 75), instead of 10 days a year after six months. Standard hours are the hours an agreement says you may require and must pay for, plus paid breaks and hours on paid leave (section 6).
The 12.5% payment on casual and additional hours
Casual hours, where you need not offer work and the person need not accept it, and additional hours, which someone on standard hours can refuse and is paid extra for, build no annual or sick leave. For each of those hours you pay a leave compensation payment of at least 12.5% of the ordinary hourly rate, every pay period, shown separately in the leave record (section 126). Today a casual whose work is too irregular for 4 weeks off can be paid at least 8% of gross earnings with each pay (Holidays Act, section 28). Extra hours a salary is agreed to cover are not additional hours. On the day the Act starts, casual staff are paid out the annual holidays they hold, and their Holidays Act sick leave ends.
How the calculator works it out
Leave hours are the standard hours a week times the accrual rate times 52 weeks, against today's 4 weeks of standard hours and 10 average working days. The payments are the hours a week times 52 times the ordinary rate times 12.5%, against 8% (or 4 weeks of pay, about 7.7%) on the same hours. It works from your averages, so the answer is a budget estimate, not a payroll figure. Today's 8% is on gross earnings, which include penal rates and allowances, while the 12.5% is on the ordinary rate only, so with penal rates the gap is smaller. Leave itself will be paid at the leave hourly rate, which leaves out overtime and has no comparison with average weekly earnings.
Records that make the switch easier
Every figure here comes from hours sorted by kind: standard, additional and casual. From 2028 the leave record must show the hours worked each day in each pay period and the hours a leave compensation payment is paid on (section 127). Our article on getting your hours records ready for the Employment Leave Act sets out what to start keeping now, and what the Act changes for an employee's leave covers the other side.
Questions
What is the 12.5% leave compensation payment?
From 6 August 2028, an employer pays at least 12.5% of the ordinary hourly rate for each casual hour and each additional hour, every pay period, instead of those hours building annual or sick leave (Employment Leave Act 2026, section 126). On $26 an hour, that is $3.25 for each hour.
Will casual staff cost more under the Employment Leave Act?
Usually, yes. Today's pay-as-you-go holiday pay is at least 8% of gross earnings; from 2028 the payment is at least 12.5% of the ordinary hourly rate. On 60 casual hours a week at $26, that is $10,140 a year against $6,490 today, before any penal rates, which today's 8% includes.
Do salaried staff get the 12.5% on overtime?
Not when their agreement says the salary covers the extra hours: those are not additional hours under section 7. Extra hours someone can refuse and is paid separately for do earn it.
How much annual leave does 40 hours a week build?
At 0.0769 of an hour for each standard hour, 40 hours a week builds 3.076 hours a week, or 159.95 hours over 52 weeks: almost exactly 4 weeks. Sick leave builds 1.54 hours a week, up to 160 hours.
Can I start using the new rules now?
No. Employment New Zealand says you must follow the Holidays Act until the new law starts on 6 August 2028, even if you are ready.
Does Team timesheets work out the leave?
No. Team timesheets at jobtracker.co.nz shows the hours staff choose to share, by person, project and task, and a CSV ready for payroll. It does not calculate leave or the 12.5%, keep leave balances or run payroll.
Sources
- Employment Leave Act 2026.
- Holidays Act 2003.
- Employment New Zealand: Employment Leave Act 2026.
- Employment New Zealand: how employers can get ready for the changes coming in 2028.
- Employment New Zealand: pay-as-you-go annual holiday payments.
- Employment New Zealand: taking sick leave.
More free tools: see all the calculators.