6 Steps to a Smooth Summer Shutdown: Holidays Act 2003 and Payroll Made Easy

Christmas might feel like a distant thought, but if you leave planning your summer shutdown until December, you could end up dealing with payroll stress while everyone else is firing up the BBQ. A little prep now will save you and your team a lot of hassle later. It means fewer last-minute panicked conversations, fewer payroll errors, and more time for pavlova.

Why Plan Early?

Sorting out your annual close-down period early is not just about ticking a compliance box. It’s about making life easier for you and your staff. By checking annual leave leave balances now, you give yourself time to:

• Spot staff who won’t have enough annual leave to cover the shutdown.

• Talk through options like leave in advance or unpaid leave while there’s still plenty of notice.

• Get your payroll team or provider organised before the silly season chaos kicks in.

• Give employees certainty so they can plan their summer holidays and family time.

  
  

Think of it as an early Christmas gift to your future self.

Common Pitfalls We See Every Year

Even well-prepared businesses can trip up when it comes to the summer shutdown. Some of the most common mistakes include:

• Forgetting to count public holidays correctly in holiday pay calculations.

• Assuming everyone has enough annual leave without checking.

• Missing the 14-day minimum notice period required under the Holidays Act 2003.

• Realising too late that employment agreements don’t include a shutdown clause.

  
  

None of these are fun to discover a week before Christmas when half the team is already winding down.

Employer’s Checklist for a Smooth Close-Down

Here’s a practical checklist to keep your shutdown prep on track:

1. Review Employment Agreements. Make sure they include a clause that allows you to direct leave during a shutdown.

2. Give Plenty of Notice. The legal requirement is 14 days under the Holidays Act 2003, but best practice is much more. The sooner you can confirm dates, the better.

3. Audit Leave Balances. Check what staff currently have and project what annual leave they’ll have by the shutdown start.

4. Start Conversations Early. If someone doesn’t have enough leave, agree now on whether they’ll take unpaid leave or leave in advance.

5. Manage New Employees. Anyone with less than 12 months’ service is not entitled to paid annual leave yet. Instead, they are paid 8 percent of their gross earnings as holiday pay up to the shutdown date, and the rest of the shutdown is unpaid.

6. Plan Your Payroll. Talk to your payroll provider or accounts team early. Make sure final pay runs cover annual leave, statutory holidays, and any leave in advance or unpaid leave arrangements.

The Upside of Doing It Right

It’s not just about compliance with the Holidays Act 2003. Getting ahead of your shutdown planning has plenty of benefits:

• Staff know what’s happening and can plan their holidays without stress.

• You avoid awkward end-of-year conversations about unpaid leave.

• Your payroll runs smoothly and doesn’t cause headaches right before Christmas.

• You get to enjoy your own summer break instead of answering payroll questions from the beach.

  
  
  
  

How We Can Help

Holiday pay legislation can be fiddly, and talking to staff about annual leave balances is not everyone’s idea of festive cheer. That’s where we can help. At My Two Cents we take the admin off your plate by offering:

• Comprehensive leave audits to project balances and spot potential shortfalls early.

• Staff communication support with drafted notification letters and emails.

• Accurate payroll processing that includes 8 percent holiday pay, leave in advance, and statutory holidays.

• Employment agreement reviews to make sure you have the right clauses in place for future shutdowns.

Ready for a Smooth Summer Shutdown?

Christmas should be about relaxing, not spreadsheets. If you’d rather spend your time enjoying pavlova, beach trips, or maybe a cheeky afternoon nap, let us handle the details. Get in touch with us today and we’ll make sure your summer shutdown is smooth, compliant, and stress-free.

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About the Author

Jo Jury is a Certified Bookkeeper (ICNZB) and Debtor & Payroll Specialist at My Two Cents Accounting & Advisory. She’s also a Xero Certified Advisor and Paidnice Specialist, supporting small businesses with practical systems to get paid faster and keep cash flow steady. Jo combines expertise with genuine care, helping clients stay on top of payroll and debtor management while keeping their finances running smoothly.