Relevant Daily Rate (RDP) for Public Holidays, Alternative Holidays, Sick Leave or Bereavement Leave
About the Author:
Paul Wilton (editor)
CA with degrees in commerce, accounting and information technology. Paul worked overseas in the “Big 4” accounting firms and served as a director at Audit New Zealand before setting up his own consultancy. Author of A-Z of New Zealand Business Law, Paul has over 20 years of experience as a business owner and consultant. He joined FBA in 2004 and is totally committed to providing excellence in quality and value to our subscribers.
Public holiday, bereavement and sick leave and alternative holiday payments are calculated using relevant daily pay or average daily pay (if applicable). Annual holidays are calculated differently.
Average daily pay may only be used if:
it’s not possible or practicable to work out relevant daily pay, or
an employee's daily pay varies in the pay period in question.
Relevant daily pay (RDP) is the pay that an employee would have earned for working on that day.
RDP includes:
payments such as regular (taxable) allowances, commission and bonuses that would have received by the employee on the relevant day
overtime pay, if the employee would have received this on the relevant day
the cash value of board or lodgings if this is provided by the employer.
RDP does not include:
employer contribution payments into an employee superannuation fund;
any payments that the employee would not have received for working on that day;
reimbursements of costs that would have been incurred by employees if they had worked, but were not incurred because they didn’t work.
Employment agreements can include a special rate of RDP for calculating payment for (any or all of) public holidays, alternative holidays, sick leave or bereavement leave, but only if the rate is at least the same as RDP.
The following is from Employee NZ:
If the employee does work on the public holiday:
it will always be possible and practicable to determine RDP
it will always be compliant with the Act to apply RDP
it is likely that the employee will expect that RDP will be used to calculate payment therefore it is recommended that RDP be used to calculate payment in all situations where an employee works on a public holiday.
FBA Editor
The legal distinction between a contractor and employee is changing. Recently there have been a number of significant Employment Court decisions shaping the law in this area.