Currently I have created a footprint by using one large retangular pad + 2 through holes.
However the DRC picks this up as an error.
Is there a better or more correct way to do this? Or is the DRC in this case being overzealous?
Datasheet for the part: http://www.pemnet.com/fastening_products/pdf/smtradata.pdf
Best Answer
As noted in the first comment the DRC is doing precisley its job, and you should not ignore it. DRCs are somewhat magic and sometimes when they encounter an error they don't actually check for other errors, so to have an error free design... You need to have and error free design, and this does not include ignored errors.
The DRC is yelling at you because you have created three separate pads, assigned to each of them a separate number, then just stuck them one on top of the other. This violates the minimum clearance allowed between pads. What can you do about that?
The third solution, actually, The Solution is what you want to use when drawing strange pads with strange shapes. Imagine a LDO SMD regulator with the tab connected to the central pin, the land pattern would look like a big square (thermal tab) connected to a rectangle going to the middle pin. You can do that with two overlapping smd pads that have the same pin number.
Disclaimer: when you are drawing the footprint for a large microcontroller that has many ground and vcc pins you might think you can assign all the corresponding pads the same number in order to have only one pin on the schematic. That is a bad idea\$^{\text{TM}}\$. When you draw the tracks on the board the DRC will assume that all that pads are somewhat physically connected together and won't force you to connect all of them. Of course they are physically connected but you should provide power (and a decoupling cap) to each of them.
So the rule is: you can give different pads the same pin number if and only if these pads overlap in some way OR you really, really, really know what you're doing.