Pay as you go 8%

Some employees may be awarded holiday pay at the rate of 8% of their gross earnings in addition to their normal salary instead of receiving four weeks of yearly leave each year. This is known as Pay as you go (8%).

This can only be done if:

• the employee is employed on a genuine fixed-term agreement of less than 12 months, or
• the employee works so intermittently or irregularly that it is impractical for the employer to provide them with 4 weeks’ annual holidays, and
• the employee must also agree to it in their employment agreement.

Setting up pay as you go 8%

Pay as you go 8% for a new employee.

In the   add employee wizard, within step 3 - Employment Details, tick on the 'Irregular Employment?' checkbox and apply the 'Irregular Employment' leave allowance template.

pay as you go for an existing employee

Go to the employee's profile > Pay Run Defaults page, at the bottom of the page, tick on the 'Irregular employment?' checkbox. And save.

Then, go to the employee's profile, and select Tax Code Declaration. Make sure that the Employment type is set to Casual. 

For those employees who are set up with Irregular employment ticked but they aren’t a casual employee, please check their Pay rates screen and ensure the PAYG 8% is not ticked and remove any units for that pay category. And save the changes.

Then from the employee's profile > Leave Allowances page, select the 'Irregular Employment' template from the leave allowances template drop down.

Click on Save.

once the setting is done, it will ensure that the employee's standard leave category default settings of 4 weeks of annual leave, 5 days of sick leave, and 10 days of domestic violence leave are not applied. Instead, the "Pay as you go (8%)" option will be applied automatically. When the employee selects the 'Irregular Employment' checkbox, the 'Irregular Employment' leave allowance template, and the Casual employment type, the "Pay as you go (8%)" pay rate will be automatically applied. 

PAYG 8% in Practice

Go to Pay Runs.

Navigate to the Pay run you wish to look at and the relevant employee.

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In the pay run, the employee's pay as you go (8%) will be automatically included as an earnings line and will calculate the 8% of the employee's gross pay.

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​If you click on the 'i' icon next to the Pay as you go (8%) 'Rate' input field, it will provide the calculation details under 'PAYG 8%'. You may add additional notes if you wish, which will appear in the pay slip (if you have the pay slip notes ticked within the pay slip settings). 

Check to ensure the pay run is correct and if so, then Finalize Pay run. 

The Pay as you go (8%) will display as a separate line item in the employee's pay slip.