Pay As You Go (8%)

Some employees may be paid holiday pay at the rate of 8% of their gross earnings with their regular pay instead of being provided with 4 weeks’ annual holidays each year. This option is called 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.

How to set up up PAYG 8%

Below are the instructions on how to apply Pay as you go (8%) automatically in each pay run for the employee.  

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

• Then, go to the employee's profile > Finance & Payroll, 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.
• Click Save.

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

• Click Save.

The above settings will ensure that the standard leave category default settings of Annual holidays of 4 weeks, Sick Leave of 5 days and Domestic Violence leave of 10 days are not applied for the employee. 

Instead, the  "Pay as you go (8%)" will automatically apply. "Pay as you go (8%)" pay rate will automatically kick in when the 'Irregular Employment' checkbox, 'Irregular Employment' leave allowance template AND Casual employment type is set for the employee.

PAYG 8% in Practice

• Go to Pay Runs.
• Navigate to the Pay run you wish to look at and the relevant employee.​
• 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 finalise pay run. 
• The Pay as you go (8%) will display as a separate line item in the employee's pay slip. 
  
  

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