Q: We pay our employees based on days and don’t intend to change that in the near future.

Ie Payslips show number of days worked, leave is requested and shown in days.

The calculation that we uses for average weekly pay is;

last 52 weeks’ gross earnings divided by 52 then divided by number of days in a week to get daily rate.

I am under the impression that we need to be dividing by weeks to be compliant with the holidays act.

A: The act allows leave to be stated in other than weeks if agreed and as long as you can show it meets the requirements of the act (you can define the week, days etc ) then all good and it is compliant.

Annual Holidays must be calculated using AWE and OWP (greater of the 2).  If the week and payments are always the same then both AWE and OWP will provide the same answer.  It is when a annual bonus would effect AWE or when a period of overtime could effect OWP.  This is when you see the differences appear.

So if you are dividing by days as long as you can relate it back to the week for the employee then no issue and long as it has been agreed.