NZ payroll migration: validate leave balances and retain their history

Current rules continue until the 2028 transition

MBIE states that the Employment Leave Act 2026 received Royal assent on 6 August 2026 and replaces the Holidays Act on 6 August 2028. The new rules apply from the beginning of an employee’s first pay period starting on or after that date.

Employment New Zealand’s guidance timeline says the Holidays Act remains in force and no employer action is required at the August–October 2026 stage. Further technical and employer guidance is scheduled in stages; the timetable is indicative.

Our buying view: do not replace functioning payroll merely because a new Act exists. If you have an independent reason to move now, make current migration quality and future product support visible in the proposal.

Ask what the exported number actually includes

PayHero’s opening-balance instructions distinguish leave already due, holiday earnings, holiday pay and the next anniversary. Its Current Leave Due field excludes estimated leave since the last anniversary, which the product calculates separately.

Confirm which components the old system includes in its exported balance. A source system’s “available” figure may not have the same meaning as the target field. Have the payroll owner explain the source definition before anyone maps the columns.

Write a short mapping note for each value: source field, meaning, unit, cutoff date, target field and validation owner. Carry unresolved differences as exceptions; do not make them disappear by forcing the totals to match.

Eighty hours is not one universal number of weeks

Use this fictional, deliberately simple example: both employees have an agreed accurate balance of 80 hours of leave due and unchanged regular work patterns. It illustrates units only; it is not the 2028 statutory conversion method.

PayHero’s conversion guide describes division for regular weeks and separate consideration where patterns are variable or have changed. A default 40-hour divisor is not a company-wide answer.

For changed or unclear patterns, have the payroll specialist resolve the underlying history and appropriate treatment. Software importing a number successfully does not validate the number’s meaning.

Require an opening-balance evidence pack

1. Agree the cutoff: identify the final old-system pay and the first new-system pay. Capture leave and corrections around that boundary.
2. Preserve definitions: retain the source export, field descriptions, units, anniversaries and the relevant work-pattern history.
3. Separate components: map leave due and other holiday-pay or estimated values to their proper target fields.
4. Resolve exceptions: inspect changed patterns, negative balances and missing history individually. Record the decision and its owner.
5. Reconcile the result: check the new system against the agreed source evidence and explain differences before the first live pay.

Use approved test records for the supplier demonstration. Include one employee with a simple regular pattern, one changed pattern and one leave-in-advance position. Have the payroll owner supply expected outcomes; do not invent an entitlement to make the software pass.

Specify support for the 2028 transition

Ask what the subscription includes as the supplier implements the new framework: product changes, customer guidance, conversion tools, testing support and any separately charged services. At this stage, a credible delivery plan is more useful than an unsupported claim that every edge case is already solved.

Do not assume a promise to update the software includes cleaning historical records or making employment-agreement decisions for the employer. Ask for the boundary in writing.

Resolve unexplained balances before switching

We would choose the provider that can explain and preserve the migration evidence over one that promises the quickest upload. Retained context helps the payroll team investigate both today’s discrepancies and later transition work.

We would hold a migration with unexplained opening differences. We would also challenge a supplier that uses the future reform to pressure a buyer into an unnecessary immediate switch.

This is a procurement and data-validation guide dated 2 October 2026. Have a qualified New Zealand payroll adviser resolve employee-specific leave treatment and validate the eventual transition against the applicable official guidance.

Questions buyers ask