About public holidays
This article is about recording your public holidays in PaySauce. We know that public holidays are an area of payroll that many employers find tricky to understand. This isn’t helped by the fact that there’s lots of incorrect information out there about what public holiday entitlements really are. If you’re looking for general guidance about public holiday entitlements and what your employees need to be paid, we’ve put together a separate article for you on that topic.
Check out our article on public holiday entitlements here: Public holiday entitlements
Here’s a quick overview to different entries or settings and what they mean for how you record public holidays:
Public holiday taken: this means the employee is getting paid for having the day off on the public holiday. I.e. it is a day they would have worked but had a day off, so they are entitled to be paid for the day at what they would have usually been paid.
Public holiday worked: this is an entry to record your employee working on a public holiday. This entry will ensure the employee is paid at time and a half (1.5x) and you’ll also have the option to indicate whether or not the employee should earn an alternative public holiday for working on the day.
No action: this means there is nothing to pay for this public holiday. The employee is not getting paid and they have no entitlement to be paid for that day (i.e. didn’t work, but it was not a day they would have typically worked).
Alternative public holiday: when an employee works on a public holiday that is a day that they would have usually worked, they become entitled to an alternative public holiday. This grants them a day in their balance that they can take at another time (as they did not receive a day off on their public holiday). Employees are entitled to receive one full day alternative public holiday regardless of how long they work on a public holiday. Employees are not entitled to receive an alternative public holiday if they worked on a public holiday that isn’t typically a working day for them (for example, if they don’t usually work Mondays but were called in to cover a shift on a public holiday that fell on a Monday).
Observed: The term ‘observed’ means the public holiday fell on a weekend and has been moved to the next working day to be ‘observed’ for most employees.
Your employee’s default public holiday entitlements will be driven by their work pattern. A work pattern is set for each employee in their settings.
The work pattern tells PaySauce who works on what day, and how many hours they work on that day. That’s the basis for PaySauce’s default entries for you. If an employee does not have a work pattern, you’ll need to select the appropriate action for their public holiday.
Applying public holidays to your pay run
From the ‘leave’ view in your pay run, we can manage public holidays quickly and easily for all employees within your pay run for this period.
Select Run a Pay.
Click the Leave View icon at the top of the screen.
‘Leave Summary’ is the default option in the Leave View menu. Select the public holiday from the Leave View menu. In this sample we can see the holiday is Waitangi Day. This Waitangi Day fell on a Sunday and is being ‘observed’ on Monday 7th.
Making your selection in the ‘leave action’ drop down
Leave action | Use when | Description |
Public holiday taken | The employee had the day off and should be paid | For all employees that did not work but are entitled to be paid for the public holiday, ensure that ‘public holiday taken’ is the selected action.
The hours will be drawn from their work pattern if they have one, or an average if they do not have a work pattern. If you do not know what the employee would have earned on the day (e.g. their hours are variable) they should be paid an average. |
No action | The employee did not work but does not need to be paid, as not a working day | For employees who did not work on the public holiday but they are not entitled to be paid as they do not usually work on this day, select ‘no action’. |
Public holiday worked | The employee worked on the public holiday | For all employees that worked on the public holiday, select ‘public holiday worked’. This allows you to specify the number of hours that the employee worked (to be paid at time and a half) as well as the alternative public holidays to add to their balance if entitled. |
Employee leave hours will be drawn from their work pattern if they have one. If an employee is set to the ‘varied hours’ employment type in their settings, the default value will be an average.
When employees work on a public holiday
When you have selected ‘public holiday worked’ because your employee has worked on a public holiday, you will need to ensure you are entering the correct values.
In the ‘hours’ field, you must enter the hours that the employee worked on the day. This may default to their work pattern hours, but you should interact with this correctly to ensure you are recording the actual hours they worked if this is different.
The 1.5 box should be checked on. This ensures that the rate applied to these hours will be multiplied by 1.5 to ensure the employee is paid time and a half for working on the public holiday.
If the employee qualifies to receive an alternative public holiday, ensure that the correct hours are entered into the ‘alt. hours’ field. The employee is entitled to receive a full day alternative public holiday, even if they worked slightly less or slightly more on the public holiday that they normally would have.
Apply the leave selections for the public holiday
Check the leave has been recorded correctly and select all staff (click the checkbox next to each name or click the heading checkbox to select all staff at once).
Click the Apply Leave Payments button.
Choose the ‘Processing’ tab at the top of the screen to return to the payroll area.
The leave will display in each employee's pay card.
Check that employees with standard hours have had their salaries or wages reduced appropriately for the leave loaded. In the sample we can see the message that the payment will be reduced due to the public holiday applied. This is correct, because the public holiday is a separate payment and we don’t want the employee to be paid twice for the day. The employee will receive the same pay they usually do when the two payments are added together (the value showing as ‘period pay’.) If an employee is being paid per hour worked (and doesn’t have a standard pay loaded each time) you should not see this message. That’s because there’s no standard payment that needs to be reduced when the leave is added in.
Amend an employee’s public holiday entry
You can change an employee’s public holiday entry either by returning to the leave view for your pay run (using the leave icon in the top left corner under the processing and finalise tabs), or by viewing your employee’s individual leave entries.
On your employee’s pay card, you can see the same leave icon. Clicking on this allows you to manage their leave entries for the pay period. You can update either the type of leave or the hours as needed.
Examples
In this sample, we can see that Fred and Tina are working on Waitangi Day and PaySauce has already recorded their public holiday correctly. They're taking the public holiday off and will still receive their relevant daily pay.
Jane - the casual worker - doesn't have anything recorded. She has no work pattern as she's working intermittently. The employer should select the right option for Jane in this case.
If her Leave Action shows 'No Action', Jane won't be paid for the day. If Jane wasn't normally expected to work on that day, 'No Action' would be correct in that case.
If the employer knows that Jane does normally work on Mondays, she should qualify for being paid for the public holiday. If Jane is to be paid for the public holiday, we would click the ‘No Action’ selection and change it to 'Public Holiday Taken'.
As a different example, if Jane worked on the public holiday the employer would select Public Holiday Worked and Jane's details would automatically change to pay her Time & a Half for working on the public holiday, with the option for an alternative public holiday to be added into her leave balance.
If she's truly a casual worker and working very irregularly she may not qualify for an alternative public holiday. In the example below, she does qualify for an alternative day. She is paid 6 hours at 1.5x her current rate, and receives a 7.5 as an alternative public holiday to be banked into her balance, as these are her average hours for each day worked (over the past 52 weeks).
Using the ‘Reduce by Leave taken’ setting
Each payment that you set up for an employee will have ‘reduce by leave taken’ turned on or off. Using this setting correctly will ensure entering and managing leave is done correctly. For more information this setting and how it works, check out this Reduce by Leave Taken setting article.
Duplicate public holiday errors
This error can occur when the employee has multiple payments set up and works on a public holiday. For example, an employee who has a standard salary as well as an hourly rate for overtime.
In this example, Sally gets paid an annual salary. She also has an additional allowance with a timesheet to capture overtime hours worked. If some hours are entered into the timesheet for a public holiday, and the public holiday worked leave is applied. The Duplicate holiday payment error will be triggered.
PaySauce has recognised that there are multiple payments for the public holiday:
In the ‘Public Holiday Worked’ leave that has been applied, and;
In the ‘Extra hours worked’ timesheet.
One way to resolve the error is to turn on the ‘Reduce by Leave Taken’ setting for the Extra hours worked allowance (click on Sally's name > select the allowance > select the box to turn on Reduce by Leave Taken).
Ensuring you have applied the correct number of hours to the ‘Public Holiday Worked’ leave is key - for example, in this scenario if the 5 hours overtime that Sally recorded was all extra time in addition to the 7.5 hours I have already recorded for her public holiday, I should change my ‘public holiday worked’ entry to be 12.5 hours total and remove the hours from the timesheet.
In short, you should ensure that your public holiday leave entry captures all of the required hours for the day, and ensure that there’s no duplicate recording of hours across the different payment options available.