1. Determine the employees current rate of pay
2. Take their new rate and manually calculate the difference between the new rate and their old rate
3. Using the difference between the rates, multiply this for the number of hours/days owing to the employee
4. Once you have determined the Gross difference to be paid to the employee, check to see if you have a Pay Code called backpay set up in your Payroll. If not, go to Maintain Pay Codes and using the F4 key, create a Gross Earnings Pay Code. You will need to put a tick in the checkbox “Allow rate to be modified”, so you can enter the amount of the backpay.
5. Go to Prepare Pays/Enter Pays for the relevant employees
6. Select the backpay pay code and enter a 1 in the Quantity column and put the total gross backpay into the rate column.
7. Click the tax override button, enter the backpay amount and select the appropriate tax code for it – note that the tax code you select is based on the employees annualized income – see the IRD’s website if you are unsure which code to use. Eg:

1. Once the Gross and PAYE have been entered, you can process the pay

MYOB Payroll incorporates a calculation for Relevant Daily Pay.

This is found by going to “Enter Pays” and going into an employees pay screen.

Select the Leave button then select the button beside “Alternative Holidays Due”. Here you will find the Relevant Daily pay calculation.

Calculating Relevant Daily Pay

When processing a pay for an employee that needs to be paid Sick Leave, Bereavement Leave, Public Holiday or an Alternative holiday the following process/questions needs to be followed:

Would the employee have been paid for x number of hours at their normal pay rate had they worked?

• If yes, enter x hours against the appropriate Pay Code. No further action required
• If not, click the Leave button, and click the Relevant Daily Pay rate button (alongside the rate for Alternative Holidays).

Is it clear what the employee would have earned had they worked?

• If yes, enter these details in the top section.

• If not, click the last 4 weeks earnings button and make sure the correct earnings are selected.
i.e. the correct dates and exclude anything out of the ordinary. ( See section 8(1)(c) of the Holidays Act 2003).

Click OK and then confirm the number of days actually worked in the last 4 weeks, and tick the checkbox to use the last 4 weeks earnings.

Check that the standard ‘hours per day’ is correct and then click OK and then OK again on the Leave Details window.
The relevant daily rate that applies fot this pay will be set for the appropiate pay codes.

Enter the standard hours against the appropriate Pay Code.

When the pay is finalised the rates for these Pay Codes will be reset back to the employee’s normal pay rate.

To reset the rates back to the employee’s normal rate without finalising cancel the pay.