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.
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.
ADP is a daily average of the employee’s gross earnings over the past 52 weeks. This is worked out by:
adding up the employee’s gross earnings for the period, and
dividing this by the number of whole or part days the employee either worked or was on paid leave or holidays during that period.
Employees are entitled to a minimum of 4 weeks pay for every 12 months of service. A week's Holiday Pay for annual leave is the greater of:
The average weekly earnings; and
The current ordinary weekly pay at the time the leave is taken.
Unless you have software that will do this for you, these calculations need to be done every time an employee takes annual leave.
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