The holiday season brings a range of unique challenges and opportunities for employers. From navigating annual leave to organising festive staff events, there’s a lot to consider. Here are some practical tips to keep things running smoothly during the summer and holiday season.
1. Paying employees for leave
Whether your business remains open or shuts down for a summer break, ensuring compliance with holiday pay and annual leave requirements is crucial.
Remember that employees on annual leave must be paid at the higher of their ordinary weekly pay or average weekly earnings.
For businesses closing down over the holidays, make sure to notify staff in advance and follow the rules for deducting leave or paying out entitlements.
2. Managing public holidays
Public holidays during summer, such as Christmas, Boxing Day, and New Year’s, come with specific obligations. If employees work on a public holiday, they’re entitled to be paid at time-and-a-half and receive a day in lieu if it’s a day they would normally work. Alternatively, if the day falls within their annual leave, it should be treated as a public holiday rather than deducted from their leave balance.
More about managing public holidays
3. Hiring summer staff: casual, fixed-term, or part-time?
Many businesses hire extra staff to handle the busy holiday period, but it’s important to use the correct employment type.
- Casual employees work irregular hours with no ongoing commitment.
- Fixed-term employees are hired for a specific timeframe or project.
- Part-time employees have regular hours but fewer than full-time staff.
Whatever the arrangement, always provide written employment agreements, ensure employees are aware of their minimum rights, and verify their eligibility to work in New Zealand.
4. Gifts, bonuses, and Christmas celebrations
Spreading some holiday cheer with gifts, cash bonuses, or festive events is a great way to reward staff. However, remember the tax implications:
- Non-cash gifts or staff entertainment are subject to fringe benefit tax (FBT) if they exceed $300 per employee per quarter or $1200 per year.
- Entertainment expenses, such as a staff Christmas party or taking your team out for lunch, are generally 50% deductible for tax purposes (as long as they don’t exceed the limits above).
- Cash bonuses are treated as additional wages and subject to PAYE.
More about FBT and employee gifts
More about entertainment expenses
More information
By planning ahead and staying informed, you can ensure a stress-free holiday season for your business and your team. For more guidance, check out the helpful resources linked above, or see our Holiday Employment Law Q&A, and enjoy the summer!
