How long service leave pay is calculated in New South Wales

By Vivian Michael | Employment

How long service leave pay is calculated in New South Wales

In New South Wales employees are  paid long service leave after 10 years of service with the same employer and are paid for each additional 5 years service.

Long service leave cannot be paid out. It’s only paid on termination.

Pro rata long service leave

Employees can get a pro rata of their long service leave payout after 5 years of service, if:

  • there is a dismissal for any reason other than serious misconduct; or
  • the employee resigns because of illness, incapacity, domestic or pressing necessity.

Calculation

The calculation (regardless of whether the employee leaves before or after 10 years service), is the higher of:

  • Pay for the last pay period up to the leave being taken; or
  • Average weekly gross ordinary rate of pay during the past 5 years.

Calculation for casuals 

For casuals, long service leave pay is the higher of:

  • The average normal weekly number of hours during the past period of 12 months; or
  • Past 5 years.

Piece workers or commission-only workers 

Here's the long service leave pay calculation for piece workers or commission-only workers:

  • The average weekly ordinary rate of pay during the past 12 months; or
  • The average weekly ordinary rate of pay during the past 5 years.
  • An average of bonuses and commissions over the past 12 months (or average over 5 years if that rate is used) and is in addition to the weekly rate.

Items not in the calculation:

  • Shift work; and
  • Other penalty rates; and
  • Overtime payments; and
  • Bonuses paid to workers that are otherwise paid more than $145,400 per year.

Allowances 

Allowances that are relate to skills (leading hand, site allowance, first aid) will count as ordinary pay.  

Parental leave

Parental leave does not count towards continuous service.

Business sale 

The employee's service is not broken and their long service leave entitlement accrues in a business sale.

There are also helpful online calculators like this one that you can use to calculate a long service leave payout. 

Do you have a long service leave question?





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About the Author

Vivian Michael is a lawyer and founder of Michael Law Group. Vivian's mission is to make quality business legal services accessible to entrepreneurs launching in Australia that would otherwise DIY, rely on legacy contracts or go without.

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