Q: We have salary staff paid weekly, standard entitlements of holiday pay, annual leave etc

Business owner would like to introduce effective immediately one paid day off for your birthday

How do I allow for that in the payroll calculations? Do I add a new leave type of Paid Birthday into Xero settings? Obviously I’ll need to type up a new clause to put into contracts.

A: Best practice would be to set it up as a separate code so it can clearly be seen and keep it away from other minimum entitlement provided by law.

I would suggest the following as this is typical for Birthday leave:

• Paid at the ordinary rate of pay
• Can be taken in a month of the birthday (does not need to be taken on the day) at the discretion of the employer (they agree on the day based on operational requirements)
• Cannot be cash out and cannot be paid out on termination
• If not taken in the month it is lost as it cannot be accumulated.