Christmas / New Year Leave 2026/27

Another year is fast passing by and there are six weeks until Christmas. As we usually do around this time of the year, McKone Consultancy would like to remind businesses/employers of their obligations around the Public Holidays and getting pay entitlements right for your people.

There are four public holidays to cater for over the Christmas / New Year period. Christmas Day, Boxing Day, New Year’s Day and the Day after New Year’s.

Depending on your industry you may also have a planned shutdown period.

So how do you ensure people get paid the right entitlements over this period?

Christmas Day and New Year’s Day. This year both Christmas Day and New Year's Day fall on a Friday. Boxing Day and the Day after New Year's Day fall on a Saturday and gets "Mondayised" to Monday 28 December 2026 and Monday 4 January 2027 respectively.

If you close your business down then your employees' leave is treated as four Public Holidays and, depending on the terms of your employment agreement, the other working days between these Public Holidays are treated as annual leave days if employees would otherwise have worked them.

Working on a Public Holiday. For those businesses that operate six or seven days a week, as Boxing Day and the Day after New year's Day (2nd January) both fall on a Saturday, you need to understand what happens if your require employees to work these days.

What your employees get will depend on whether Saturday is a day that the employee would have otherwised worked. had it not been a Public Holiday. In some cases, the Public Holiday stays on the Saturday. In others, it moves to Monday.

If the employee would have otherwised worked on the Saturday, then the Public Holiday stays on the Saturday for them. For these employees the Public Holiday is NOT transferred to the Monday. If they also work the Monday, then Monday is treated as a normal day for them. They do not get to have the Public Holiday on both the Saturday and the Monday.

If an employee who normally works on a Saturday works Boxing Day and/or 2nd January they must get paid at least time and a half for every hour they work plus they also get an alternative holiday. If they do not work the Saturday they get paid their normal pay for the Saturday (as annual leave) and DO NOT get an alternative day.

For those employees who do not work Saturdays, the Public Holiday, for them, moves to the Monday. This is because the weekend day is not an otherwise working day for them. The Saturday is treated as a normal day, not a public holiday.

For those employees who do not work Saturdays and the for whom Monday is a day they would have normally worked, if they work the "Mondayised" Public Holiday they are paid at least time and a half, and get an alternative holiday. If Monday is not a day they would otherwise work, they are only paid at least time and a half, and DO NOT get an alternative day.

This can be very confusing for employers and employees alike. It is important you understand how the working on and being paid for a Public Holiday works for you. More informaiton can be found on MBIES's Employment website.

You should also check their employment agreement to check that payment for working the Public Holiday is only time and a half (which is the minimum payment). Some employment agreements may provide for a higher penal rate.

To determine the rate of pay for the Public Holidays, the Holidays Act 2003 provides that an employee is to be paid their “relevant daily pay” or, in some situations their “average daily pay”.

Where your employee is salaried and works regular hours, this should be a straightforward calculation using “relevant daily pay.” However, where it is impossible or impractical to determine the relevant daily pay, due to the employee working varying hours, the “average daily pay” over the previous 52 weeks can be used.

When it comes to paying employees for Public Holidays, your employees are entitled to be paid for the Public Holiday, however, you should watch out for the following issues:

• Consider whether the rate paid includes regular allowances or payments outside the employee’s base rate. These payments may continue to be automatically paid outside the relevant or average daily pay calculation, but if not, they will need to be taken into account as part of the calculation.

• Where relevant daily pay applies, consider whether the employee has been paid according to the hours that they are likely to have actually worked (for example, if a waged employee regularly works eight hours at their base rate but then works two hours’ overtime on that particular day of the week, the relevant daily pay payable should reflect this).

Check that your payroll system is not defaulting to a “four-week look back” calculation for relevant daily pay. The Holidays Act used to provide for an averaging formula based on the last four weeks’ gross earnings, but since the average daily pay formula was introduced in 2011, this no longer applies to relevant daily pay calculations.