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November 2015 update

November 18, 2015

With only 5 or 6 weekly pays until Christmas, it’s timely to think about annual leave, public holidays, terminations and parties.    I’ve also included a couple of hints and tips, a reminder about reading the fine print and my availability over Christmas.

  • Public Holidays
  • Employee Terminations close to Christmas
  • Example: Calculation of final payment for annual holidays
  • Christmas Parties and Presents – what is deductible?
  • Excel Tip – Pin to List
  • Software fine print – a reminder
  • Some humorous answers from an accounting product quiz
  • aboutBusiness Christmas break

Public Holidays

This year Boxing Day and the Day after New Year’s Day fall on a Saturday.

If your employees normally work Saturdays, their Public Holidays are observed on the Saturday.

If they do not normally work Saturdays, their Public Holidays are observed the following Monday.

Christmas Day                          December, Friday 25th
Boxing Day                                December, Saturday 26th or Monday 28th
New Year’s Day                         January, Friday 1st
Day after New Year’s Day      January, Saturday 2nd or Monday 4th

New Zealand at Work has an excellent explanation of how to calculate rates for employees who work on a Public Holiday.

Employee Terminations close to Christmas

When an employee terminates in December, business owners sometimes get a shock about how much extra they have to pay the employee.

On resignation or termination, the employee’s final date of work is notionally extended by any annual holiday entitlements not taken.

For example, if an employee is to finish work 10 days before a public holiday and has more than 10 days remaining from their annual holiday entitlement, the employee is entitled to a day’s payment for the public holiday if it is a day on which they would normally have worked.

Example: Calculation of final payment for annual holidays

Lucy has been employed for 1 year and 1 month.  She leaves her employment on 11 December, and the last date she became entitled to annual holidays was 11 November.  Lucy has already used one week of annual holiday so has three weeks remaining at the end of her employment.  Lucy also has two alternative holidays from working on public holidays that are left untaken at the end of her employment.  Lucy is entitled to:

  • Payment for the two alternative holidays
  • Payment for the three weeks of annual holiday remaining of her four week entitlement from 11 November
  • Payment for 4 public holidays
  • Payment at 8% of gross earnings for the one month period between 11 November and 11 December.  The gross earnings for the 8% calculation also include the holiday pay paid to Lucy for her three weeks of unused holiday, the value of the two alternative holidays and the value of the four public holidays.

Unless agreed otherwise, the employer must pay outstanding holiday pay in the payday that relates to the employee’s final period of employment. This is normally what would have been the next scheduled payday had the employment not ended

If you’re not sure about your situation, give us a call.

Christmas Parties and Presents – what is deductible?

If you’re not sure what is 100% tax deductible and what is subject to fringe benefit tax, check out business.govt.nz for the definitive answer.

If that’s too much for you, let me know and I’ll email you a summarised list.

Excel Tip – Pin to List

This cool feature allows you to pin a list of frequently used Excel files to the open recent list so that they don’t disappear when you open too many other files.

  • File…Open…Recent WorkBooks
  • Right Click on file to be pinned
  • Pin to List
  • File moves up to the top section

60% off MYOB AccountRight Files

Take advantage of this discount while it lasts.  60% off second and subsequent AccountRight Live files.  Offer expires 18th December.

The fine print – a reminder

Remember to read the terms and conditions when you sign up for software.   They change periodically, so it’s worth having a re-read occasionally.  Both MYOB and Xero have a fair use policy for their bank feeds.

  • Xero doesn’t specify a number – they say: “Xero reserves the right to pass on any charges related to the provision of bank feed data on a case-by-case basis at Xero’s sole discretion”.

Bank Feed costs are a small price to pay for the time savings it offers but it is worth remembering they exist.

Xero also has usage limitations:  “Use of the Service may be subject to limitations, including but not limited to monthly transaction volumes and the number of calls you are permitted to make against Xero’s application programming interface”.

This is unlikely to affect most Xero users but it is something to be aware of if you are a larger business with huge volumes of transactions. – click here for Xero Terms of Use

Some humorous answers from an accounting product quiz:

  1. How would you enter a quote?
    By typing “to be or not to be, that is the question”
  2. What does the 13th period mean?
    I guess I’m not pregnant after all.
  3. How do you delete a cheque you entered a week ago?
    Go to the bank and ask for it back.
  4. What do you enter through the Historical Sales area?
    All the lies you can to impress the bank manager.
  5. How would you record a payment from a customer for $250 if the outstanding invoices for that customer only totalled $200?
    Bank the $250 in your personal account and write the cheque for the correct amount. Then hope the customer doesn’t realise.
  6. When doing a journal entry for depreciation what would the transaction be?
    A guess at what the wear and tear on your equipment is by the owner (i.e. the IRD).
  7. What would you do before running Start a New Year?
    Have big booze up and sing “Auld Lang Syne”.

aboutBusiness Christmas break

I will be away from the office from Monday 21st December at 5.30 pm returning Tuesday 29th December 8.30 am.  If you need me during that time I am available by mobile phone.

Thank you to those of you that kept in touch about my health.  It’s been six weeks since the operation and I’m getting around like there’s nothing wrong.  Have to say that the healing took a lot longer than I imagined.

It’s unlikely that I’ll squeeze another letter out before Christmas so, if I don’t, thank you for your support in 2015, and I look forward to seeing you all again in the New Year.

Colleen King
MYOB Certified Consultant
MYOB EXO Employer Services Business Partner
Reckon Professional Partner
Xero Certified Advisor
MoneyWorks Consultant
Ostendo Consulting Partner

Ostendo® adds advanced inventory, job costing, manufacturing, service and distribution to your accounting system.

For more information about my products and services visit my web site:  www.aboutbusiness.co.nz

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