Employees
Taking annual holidays
You are entitled to at least 4 weeks of paid annual holidays (annual leave) when you have worked for your employer for 12 months.
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Please note, the Holidays Act is currently under review. For updates, see: Holidays Act reform - Ministry of Business, Innovation and Employment(external link) |
What you’re entitled to
After each 12 months of continuous employment with an employer, you are entitled to no less than 4 weeks of annual holidays as paid time off work. Your employment agreement will say what your annual holidays entitlement is.
You may take annual holidays in advance of becoming entitled to them if both you and your employer agree.
Certain employees can agree to be paid at least 8% of gross earnings in addition to their usual pay instead of taking annual holidays, but only if they meet certain criteria.
Your annual holidays entitlement stays available until you have taken the holidays or it has been paid out (‘cashed-up’).
Your employer:
- must allow you to take annual holidays when you want to unless they have a good reason not to
- must pay you for annual holidays before you take them unless you have agreed to be paid in your normal pay cycle
- can require you to take annual holidays in certain circumstances
- can choose to let you take some of your annual holiday entitlement in advance.
In some cases, you can agree with your employer to have your annual holidays paid out with your regular pay instead of taking time off. This is called ‘pay-as-you-go’ holiday pay. This can only happen if you:
- are on a fixed-term agreement of less than 12 months, or
- work so irregularly or intermittently that it is impossible in practice for your employer to provide you with 4 weeks’ annual holidays in the normal way.
Pay-as-you-go annual holiday payments
You can also ask to ‘cash-up’ up to 1 week of your annual holidays each year. If your employer agrees, you can exchange up to 1 week of your holidays for pay.
Leave and holidays: A guide to employees’ legal entitlements [PDF, 2.1 MB]
Calculating annual holiday entitlement
What constitutes a ‘working week’ and how you calculate your holiday entitlement depends on your working arrangement.
If you usually work the same number of days or hours each week, your ‘working week’ will be clear.
If your ‘working week’ is not clear, you and your employer can agree on how your entitlement to 4 weeks of annual holidays will be met. This can be by:
- defining a week in terms of days or hours, or
- agreeing to a method your employer will use to define it.
If you work the same days and hours each week
If you work the same hours on the same days each week, your annual holiday entitlement is simple to work out.
For example, if you are working 3 x 8-hour days each week at the time you take annual holidays, a week will be 3 days, or 24 hours (3 days x 8 hours).
If you have a consistent pattern of work, but it's not the same every week
You may have a consistent pattern of work, but it’s not the same each week. This could be because:
- you work the same total number of hours or days each week, but the number of hours each day or the days worked each week change
- the total number of days you work each week is the same, but the total number of hours changes
- the total number of hours you work each week is the same, but the total number of days you work changes
- you have a work pattern that is consistent but not based on a 7-day cycle, for example, you work 4 days on, 4 days off.
If this is the case, you can agree with your employer to work out your annual holiday entitlement in either days or hours.
Your employer should discuss the consequences of the choice with you and help you choose the best option for your situation.
If you have an unpredictable work pattern
You may have an unpredictable work pattern and it's not possible to define in advance what a working week looks like – for example, you have no guaranteed hours or you work to a roster that changes unpredictably each week.
If this is the case, you and your employer should try to identify if there is a pattern of work that could be used to calculate a working week for annual holiday entitlement. This must be a fair and reasonable reflection of your working week and agreed to by both parties. It could be based on:
- the agreed hours in your employment agreement
- the days and hours you have been working in the weeks leading up to the annual holiday being taken
- another method (for example, the average number of hours worked over a set period) agreed to by you and your employer.
Under New Zealand law, annual holidays are not accrued. Employees get their 4-week annual holiday entitlement after they’ve worked for their employer for 12 months and for each 12 months after. If you take annual holidays before you are entitled to them, you are taking them in advance.
However, some payroll systems work by accruing holidays from when employment starts. For example, your payslip or pay record might show ‘accrued holidays’ or ‘accrued leave’ based on the hours or days you’ve worked. If your annual holidays are being accrued, it’s possible you will not get the correct entitlement, especially if your days or hours of work have changed or vary. This is because your holiday entitlement should be based on what a week is for you at the time you take your holiday. We recommend talking to your employer if you think you might not be getting your 4-week annual holiday entitlement.
Getting paid for annual holidays
You are entitled to be paid for annual holidays before they start unless you and your employer agree that you will be paid for annual holidays in your normal pay cycle.
If you agree to be paid in your normal pay cycle, this should be recorded in writing – usually in your employment agreement.
When you can take annual holidays
In general, you should be able to decide when to take your annual holidays. Your employer must:
- agree to your request for annual holidays before you take the time off – or have a good reason for declining it, for example, others having already arranged holidays at the same time
- allow you to take at least 2 of your 4 weeks’ annual holidays in one go
- allow you to take annual holidays within 12 months of the date you become entitled to them.
Your employer can refuse a request to take annual holidays in advance.
When you might be required to take annual holidays
Your employer can require you to take annual holidays if:
- you cannot agree with them about when your annual holidays will be taken, and they give you at least 14 days' notice, or
- they regularly close down for a certain period every year and give you at least 14 days’ notice.
Annual closedowns and holidays
Your employer cannot make you take annual holidays if:
- your employer closes the workplace unexpectedly (for example, if there was a natural disaster), and
- you are given less than 14 days' notice, and
- you are willing and able to work.
Employment during and after disasters
Your employer cannot make you take annual holidays in advance.
Cancelling annual holidays
Sometimes you or your employer might want to cancel annual holidays that have already been arranged.
Neither you nor your employer have to accept the other’s request to cancel annual holidays, but you should negotiate a solution together in good faith. For example, you could agree to:
- take a holiday at another time, or
- reduce the amount of annual holidays you take.
Any changes to arrangements should be in writing.
Vinh has been working as an administrator for a small mechanic for 2 years. He has arranged with his boss to take 2 weeks of his annual holidays over the school holidays in a month’s time. 1 week before Vinh is about to go on holiday Vinh’s boss asks him to cancel his arranged annual holidays as the workshop has become unexpectedly busy.
Vinh does not agree to cancel all his requested holidays because he wants to spend time with his family over the school holidays. However, he does offer to postpone 2 days of his arranged annual holidays and work these days to support the business.
When employment ends
When you leave a job, if you have unused annual holidays or have annual holidays you are not yet entitled to take (because you have not yet worked 12 months), your employer must pay you their cash equivalent in your final pay.