Calculating Long Service Leave

Full time, part time and casual employees all build up long service leave. When a staff member has been with an employer for 10 continuous years, he or she is entitled to take long service leave.

Continuous employment is not negated by time off for parental leave, injury or illness, unpaid leave or dismissal and subsequent re-employment (with a certain time frame). Resignation automatically breaks continuous employment.

There are different rules for each state and territory which can make things quite complicated if you're trying to work things out yourself.

Factors such as continous employment, the rates paid for long service leave, pro rata LSL on termination and when an employee can take their leave can vary depending on your location within Australia.

In a number of states, any employee who ceases employment after seven years of continuous employment is entitled to be paid LSL. To look at the specific rules for your location, click on the relevant state business website on our resources page.

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To calculate long service leave
, the amount of weeks owed must be determined. This is based on the amount of continuous service. You also need to work the dollar value a 'week' is worth for that specific employee. Influencing this will be whether the staff member has fixed or changing working hours, and whether these circumstances have changed over the qualifying period.

With so many variables, it is a good idea to acquire the services of a professional company to handle the calculations. And as a business owner, make sure factor long service leave for your staff into your cash flow forecasts so you don't take an unexpected hit down the track.

Long service leave:

  • is governed by state and territory laws
  • can generally be taken after 10 years continuous service
  • is generally paid at the employee's ordinary rate of pay
  • cannot be cashed out in most cases
  • is paid out to eligible employees upon termination of employment
  • can apply to casual employees.

For more information, call Crawshay Consultants on 03 9882 5837.