How is annual leave taken calculated?
Annual leave is calculated based on the higher of the following three options:
1. Relevant daily pay (RDP)
2. Average daily pay over the past 4 weeks (ADP 4 weeks)
3. Average daily pay over the past 52 weeks (ADP 52 weeks)
More information can be found here.
Daily pay explanations
What is RDP?
RDP is the value of an employee’s normal working day.
For example, if an employee is employed to work 8 hours a day @ $25, their RDP would be $200.00.
If an employee is on a $52,000.00 salary per annum and they are contracted to work 8 hours a day, 5 days a week, their RDP would also be $200.00 ($52,000.00 / 52 weeks = $1,000.00 / 5 days = $200.00)
What is ADP 4 weeks?
ADP is a daily average of the employee’s gross earnings over the past 4 weeks.
For example, if an employee earnt $4,600.00 over the past 4 weeks and they were paid for 21 days, their ADP would be $219.05 ($4,600.00 / 21 days).
What is ADP 52 weeks?
ADP is a daily average of the employee’s gross earnings over the past 52 weeks.
For example, if an employee earnt $55,000.00 over the past 52 weeks and they were paid for 270 days, their ADP would be $203.70 ($55,000.00 / 270 days).
More information can be found here.
Example
An employee has the following daily pay rates:
- RDP: $200.00
- ADP 4 weeks: $219.05
- ADP 52 weeks: $203.70
As a result, the employee would be paid $219.05 if they were to take an annual leave day, as this is the highest daily pay.
How is annual leave accrual calculated?
Annual leave accrual is derived from the employee’s roster and their annual holiday entitlement.
An employee is entitled to four weeks’ of annual holidays each year when they have worked for their employer for 12 months. For more information on this, click here.
This means that if an employee works 5 days a week, their accrual rate would be calculated as follows:
- 5 days x 4 weeks of annual holiday entitlement = 20 annual leave days accrued per annum
- 20 annual leave days per annum / 365 days in a year = 0.0548 days of annual leave accrued per day
Example
| Days on per week | Annual holiday entitlement weeks | Annual leave days accrued per year | Annual leave accrual rate |
| 4 | 4 | 16 (4 days x 4 weeks) | 0.0438 (16 / 365) |
| 5 | 4 | 20 (5 days x 4 weeks) | 0.0548 (20 / 365) |
| 6 | 4 | 24 (6 days x 4 weeks) | 0.0658 (24 / 365) |
If an employee has a variable work pattern, consider automating their roster. More information can be found here.