Relevant daily pay: what it is and how it is worked out

What goes into relevant daily pay

The definition is in section 9 of the Holidays Act 2003. Relevant daily pay is the amount you would have received had you worked on the day concerned, and it includes:

• productivity or incentive payments, including commission, that you would have received that day;
• overtime you would have been paid that day;
• the cash value of any board or lodgings your employer provides.

It leaves out your employer's contributions to a superannuation scheme. Employment New Zealand adds that regular daily allowances which are likely to be taxable, such as an on-call allowance, count, while reimbursements of costs do not. Your employment agreement can set a special rate of relevant daily pay, but only if it is at least what the law would give.

The test is about that particular day. If you were rostered for a long shift, you are paid for the long shift. Employment New Zealand gives the example of an employee who is sick on a Saturday when he would have worked two hours' overtime: his sick pay must include the overtime.

A worked example: a sick night with overtime

Tama earns $30 an hour. His agreement pays overtime at time and a half, and a night allowance of $3 for every hour of a night shift. He is rostered for a 10-hour night shift on Wednesday, 8 ordinary hours and 2 hours' overtime, and he is sick and stays home.

His sick pay for the day is $360, not the $240 his base rate alone would give. The same $360 is what he is owed if that Wednesday is a public holiday he does not work, as long as it is a day he would otherwise have worked, unless average daily pay applies (below).

If he works the whole shift on the public holiday instead, section 50 requires at least his relevant daily pay for the time worked plus half that amount again: $360 plus $180, which is $540. This assumes his agreement has no penal rate for public holidays or particular days; one could change the sum. Working it also earns him an alternative holiday. Our article on whether shift work is worth it looks at shift allowances after tax.

When average daily pay is used instead

Relevant daily pay is the starting point. Since 1 April 2011, section 9A has let an employer use average daily pay instead, but only if it is not possible or practicable to work out relevant daily pay, or your daily pay varies within the pay period in which the holiday or leave falls. Average daily pay is your gross earnings for the last 52 weeks divided by the days you worked or were on paid leave or holidays. Employment New Zealand says that where daily pay varies in a way so regular and predictable that relevant daily pay is still easy to work out, the employer can choose either.

Annual holidays are paid differently, by the week, at the higher of your ordinary weekly pay and your average weekly earnings. Our guide to leave entitlements in New Zealand sets out who gets each kind of leave, and when.

Checking yours, and the change in 2028

Relevant daily pay is only owed for a day you would otherwise have worked: falling sick on a day you were not rostered does not give you paid sick leave. When a payslip shows a day of leave, check it against what that day would have paid, including any overtime and allowances on your roster. If you and your employer cannot agree on the figure, a labour inspector can decide it under section 11, and Employment New Zealand is on 0800 20 90 20.

Your Career's Leave section keeps count of the days: your annual and sick leave balances, worked out from your start date or your latest payslip, and every day you take or book. It does not work out your relevant daily pay, so the dollar figure is still one to check on your payslip. The demo shows it with an invented year in a job, with no account needed.

These rules come from the Holidays Act 2003. The Employment Leave Act 2026 replaces it on 6 August 2028; until then the current rules apply, and Employment New Zealand says employers cannot start following the new law early. Under the new Act, annual and sick leave build up in hours, and relevant daily pay and average daily pay give way to a leave payment for each hour, generally at your base rate plus any fixed allowances, without commission or other allowances.

Keep your leave in one record