How To Calculate Average Daily Pay
Average Daily Pay may be used only when it is impossible or impracticable to determine an employee’s relevant daily pay,
or where their daily pay has varied within the pay period in question.
The first step is to calculate the employees gross earnings.
Enter the gross amounts for the parts which make up an employee’s pay, over the 52 calendar weeks (or however
many weeks the employee has been employed) back from the last pay period.
The following payments aren’t included in gross earnings:
- Payments the employer is not contractually bound to make.
- Weekly compensation paid by ACC.
- Payments made in relation to the employee's voluntary military service.
- Reimbursement for expenses incurred on the job.
- Discretionary or ex gratia payments (it is recommended you seek further information or advice before deciding a payment is discretionary or ex-gratia and therefore should not be included in gross earnings.
- Superannuation contributions.
- Cashed-up annual leave.
The second step is to enter the number of whole and part days the employee worked during the last 52 calendar weeks. If the employee has worked for the employer for less than 52 weeks, enter the number of whole and part days that they have worked for their employer since they started work. The number of days and part days worked includes any days that the employee was on a paid holiday or paid leave. You should refer to your wages and time records for this information. The whole and part days are added together and the gross earnings figure is divided by this amount.