What is holiday pay as you go (HPAYG)?

Holiday Pay As You Go can be paid with an employee's pay when an employee is on a fixed-term contract of less than 12 months, or when they work on a basis that is so intermittent or irregular that it is impracticable for the employer to provide the employee with 4 weeks’ annual leave.  

MBIE outlines in this article that in addition to this, HYPAG can only be done if the employee agrees and it is clearly stated on their pay records. To determine if an employee is still eligible for HYPAG, the employer should also regularly review the employee’s work pattern to make sure a clear work pattern hasn’t developed.

If your payroll system doesn’t have an HPAYG setting like PayHero, it can be calculated at 8% of gross earnings.