The purpose of the 'Leave Pay Rates' setting is to configure the applicable calculation method to be applied in a pay run for daily based and weekly based leave specific to that employee. To do this, go to the employee's file > Pay Rates screen, then under 'Leave Pay Rates', select the appropriate calculation method.
The default settings for each employee is set to 'Relevant daily pay' (RDP) and ordinary weekly pay 'OWP agreed rate'.
RDP/ADP calculation method for daily based leave
Relevant daily pay (RDP) or average daily pay (ADP) calculation method is used for the purpose of calculating daily based leave such as Bereavement leave, Alternative leave, Public holidays, Domestic & Violence leave and Sick leave.
Relevant daily pay (RDP)
RDP means the amount of pay that the employee, employed on a regular working pattern, would have received had the employee worked on the day.
You must use RDP unless the employee’s daily pay varies in the pay period or it is not possible or practicable to determine RDP. In these 2 situations only, you may (but don’t have to) use ADP.
Average daily pay (ADP)
ADP is used if it is not possible or practicable to determine an employee’s relevant daily pay or the employee’s daily pay varies within the pay period when the holiday or leave falls.
For more details on how daily leave is calculated in a pay run using RDP or ADP, refer to this article.
OWP calculation method for annual holidays
For annual holidays, OWP calculation method of OWP agreed rate or OWP 4 weekly pay formula is used for the purpose of calculating the greater of ordinary weekly pay (OWP) and average weekly earnings (AWE) for Annual holidays.
Ordinary weekly pay (OWP) - agreed rate
OWP - agreed rate is the amount an employee who is employed on a regular working pattern would normally earn for an ordinary working week.
Ordinary weekly pay (OWP) - 4 weekly formula
When it isn’t possible to work out ordinary weekly pay in terms of the amount the employee normally receives for an ordinary working week then ordinary weekly pay must be calculated in accordance with the ordinary weekly pay formula.
For more details on how annual holidays is calculated in a pay run using AWE and OWP, click here.