Including Pay Types in Gross Earnings

Many of the calculations that are associated with the NZHA, including average weekly earnings and ordinary weekly pay, are calculated using the employee's gross earnings. New Zealand regulations specify that gross earnings are comprised of any payments that an employer is required to make to an employee. To ensure that leave pay rates are calculated correctly, you must specify, on each pay type, whether the earnings associated with that pay type are included in gross earnings.

To include the pay type in the employee's gross earnings, you must set the pay type to calculate for tax input 1. You can also specify whether you want to include the earnings in the employee's Average Gross Earnings (AGE) calculation. You can accumulate both the amount and the hours associated with a pay type or to accumulate only the amount associated with the pay type. The method that you select depends upon the organization's business processes.

Examples of pay types that might be included in gross earnings are:

• Salary and regular wages

• Allowances

• Overtime payments

• Piece work payments

• Commissions

• Leave payments

Examples of pay types that might be excluded from gross earnings are:

• Discretionary payments that the employer is not bound to pay.

• Overtime that is not part of regular pay.

• Payments made by ACC (Workers' Compensation).