Q: Can you please point me in the right direction to where I can find historic law on bonuses being included in Annual Leave?
I have been reading the Payroll practice guide and understand which bonuses are included, and will be reviewing the employment agreements this week, however I need to clarify how far back I need to go to include bonuses in gross earnings. Some employees have been on staff and receiving regular performance-based bonuses for over 10 years and I cant see this being included in their annual leave calculation.
This new client is wanting to put this right as they were relying on the payroll system to get it right, however on initial review of the payroll it has left me with concerns.
A: If the bonus is taxable and agreed (written into the employees employment agreement, policy, verbal), the employee has to do something to get it (KPI, sales target etc) and they have an expectation to get it then that must be included in gross.
This requirement has been part of the act since 1st April 2004 when the act was implemented.
But the liability period is 6 years and this is based on the holiday and leave record (Section 81) of the Holidays Act.