Average daily pay: the 52-week formula and when it applies

The formula, step by step

Section 9A of the Holidays Act 2003 sets it out as one division:

1. Take your gross earnings for the 52 calendar weeks before the end of the last pay period before the calculation. If you have worked there for less than 52 weeks, Employment New Zealand says to use the weeks you have been employed.
2. Count the whole or part days in which you earned that money, including days of paid holidays or paid leave. Leave out every other day you did not actually work, such as days off and unpaid leave.
3. Divide the first figure by the second.

Gross earnings has a wide meaning in the Act. It includes your wages or salary, taxable allowances, overtime, commission and the pay you received for holidays and leave. It excludes reimbursements of costs, true discretionary payments, your employer's superannuation contributions and annual holidays you cashed up.

A part day counts in full. A 3-hour shift adds one day to the count, the same as a 9-hour shift, so a year with many short shifts gives a lower daily average than the same pay earned over fewer, longer days.

When your employer can use it

Relevant daily pay, what you would have earned on the day, is the starting point. Since 1 April 2011, section 9A has let an employer use average daily pay instead in only two situations:

• it is not possible or practicable to work out your relevant daily pay, for example because there was no roster to say how long you would have worked; or
• your daily pay varies within the pay period in which the holiday or leave falls.

Employment New Zealand says employers must use relevant daily pay unless one of these applies, and that where pay varies but in a way so regular and predictable that relevant daily pay is still easy to work out, the employer can choose either. Annual holidays never use it: they are paid at the higher of your ordinary weekly pay and your average weekly earnings.

A worked example: irregular shifts

Priya works in a café at $27 an hour. Her shifts run from 3 to 9 hours, and the roster changes every week. The café closes on Labour Day, Monday 26 October 2026, and she usually works Mondays, so it is an otherwise working day and she is owed a paid day off. With no shift rostered for that Monday, nobody can say how long she would have worked, so her employer uses average daily pay.

She is paid $162 for Labour Day. Had the roster already given her an 8-hour Monday shift, her relevant daily pay would have been $216. Because her daily pay varies within the pay period, her employer could still lawfully choose average daily pay, $54 less. An agreement can promise better than the law, so it is worth reading yours. Our article on casual and permanent part-time work covers when irregular hours still come with full leave rights.

Checking it, and what changes in 2028

Ask your employer which method it used and the two numbers behind it: the 52 weeks' gross earnings and the day count. If you cannot agree, a labour inspector can decide under section 11, and Employment New Zealand is on 0800 20 90 20. Our guide to leave entitlements in New Zealand sets out who gets each kind of leave.

Your Career's Leave section records every day of leave you take or book, by kind, and keeps your annual and sick leave balances; it does not calculate average daily pay, so the dollar figure stays one to check on your payslip. The demo shows the Leave section with no account needed.

All of this is Holidays Act 2003 law. The Employment Leave Act 2026 replaces it on 6 August 2028; until then the current rules apply, and Employment New Zealand says employers cannot follow the new law early. The new Act has no average daily pay: leave is paid as a leave payment for each hour, at a leave payment rate set out in section 118.

Keep your leave and pay in one record