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Calculate tax on holiday pay
Make PAYE and other deductions as regular pay when holiday pay is paid:
- instead of an employee's regular pay when they take annual leave
- as part of an employee's regular pay at the rate of 8% of their gross earnings, or
- to a non-resident seasonal worker who is using the NSW tax code.
Make deductions as a lump sum (extra pay) when holiday pay is paid on top of an employee's regular pay. This includes when:
- holiday pay is paid as a lump sum before the holiday is taken (holiday pay paid in advance), or
- an employee gets their holiday pay paid as a lump sum at the end of their employment.
For more information about the changes to taxing holiday pay, go to the
- Commissioner's operational position on calculating PAYE on holiday pay
- Commissioner’s interim operational position on calculating PAYE on non-resident seasonal workers’ holiday pay
For more information about holiday pay, go to the Ministry of Business, Innovation and Employment's website
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