The GoSmartHR Blog

The cost of paid leave and public holidays for employers

It is easy for employees to go online, capture the start and end date of their leave, hit submit and hope it gets approved. When it comes to leave, the greatest challenge employees face is having enough leave days. The challenge for employers is far greater. Especially when public holidays come around and everyone wants to take leave at the same time, leaving no-one holding the fort.

Easter in April

Leave Calendar

We enjoy 12 public holidays a year in South Africa, yet these public holidays result in billions lost in turnover.

When Easter falls in April, Freedom Day on 27 April and Workers Day on 1 May, these days become attractive to employees, and businesses must deal with four-day weeks for four weeks. This affects the productivity of staff as well as the output during that time. And the cost of paying employees for an extra day off or paying double if they do work on the public holiday, is a cost many businesses struggle to afford.

Public Holidays Act

Every employee is entitled to the public holidays published in the Public Holidays Act (PHA) (section 5(1) of that Act). You as an employer are entitled to remunerate your employees for these public holidays (section 5(2) of the PHA and section 18(2) of the Basic Conditions of Employment Act (BCEA)).

If your employee works on a public holiday (and that day would have been a normal working day), you are entitled to pay double the normal wage for that day – businesses must choose between forfeiting the productivity of the employee for that day (and pay normal wages for the public holiday) or pay double for the employees who work on the day.

Leave payouts

When an employee leaves a company, they are legally entitled to get paid what is still due to them, including their leave – another cost employers need to budget for.

According to the labour law, on termination of an employee, you need to pay them all annual leave due to them that has not been taken.

Ensure that you have checked their employment contract for any special terms on final pay, checked their annual leave allowance for any outstanding accrued entitlement and ensure all outstanding expense claims have been settled, and check if they are part of any financial incentive scheme.

Also make sure that they return any equipment belonging to the company before they leave – otherwise this could be an additional cost to you.

If an employee has resigned from their role, they have the right to be paid for any annual leave that they have accrued but haven’t used. Alternatively, you may want to give them the choice to take their leftover leave during their notice period.

However, if the employee was dismissed due to gross misconduct, they will still need to be paid for their outstanding leave.

There is an obligation on the employer to carefully monitor the annual leave usage by employees – and to ensure that employees take their leave in accordance with the policy.

The Smart online leave system that pays for itself

In an online age, HR departments need to focus on strategic actions rather than low value administrative tasks and leave enquiries. Financially, leave liability and absenteeism need to be accurately managed.

The GoSmartHR online leave solution efficiently and accurately manages leave in your company.

Employees can check leave balances and apply for leave online, while managers can check future leave balances, helping them plan ahead for any future employees leaving, and the costs associated with it.

Leave types and leave rules are easily configurable to follow your company’s policies to ensure fairness and flexibility. This online leave solution, in addition to a whole host of functionality, also allows you to block off leave periods to prevent leave applications over critical times and ensures public holidays are automatically taken into account.

The GoSmartHR leave engine has the flexibility to manage leave as a strategic HR tool for staff retention increasing leave days with years of service or awarding bonus leave. Leave policies can be applied at group or individual level. With GoSmartHR leave analytics your company’s leave liability can be monitored in real time. Sick leave trend reports can highlight problem areas and dramatically reduce unscheduled leave and identify sick leave abuse. In fact, just this saving could pay for the GoSmartHR online leave system.

Get your leave policies in place and save costs in the long run

Ensure that your company policy is in place, and all employees are aware of how the leave policy works. It is also a good idea to capture the public holidays for the year allowing the business and employees to plan ahead – remember public holidays that fall on a Saturday will fall away for all except those working on the day.

Accurate record keeping will also go far in ensuring no extra costs slip through and upset your business budget.


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