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How is long service leave calculated?

Easily relate the legislation with your situation

On this page

  • Use the long service leave calculator
  • Understand the legislation and how long service leave applies to different wage types
  • Read common examples of how long service leave is calculated
  • Calculate long service leave correctly

Use the long service leave calculator

The Victorian Government's online calculator assists both employees and employers covered by the Long Service Leave Act 2018 (LSL Act 2018) to figure out someone's leave entitlement. 

You'll be prompted to fill in employment dates and any leave already taken, and an answer will be provided in seconds.

Although answers The calculator provides fairly accurate answers, they should be verified by an independent party, such as your payroll office, union or a legal adviser.

Use the long service leave calculator

Ordinary pay

Legislation

Ordinary pay is defined as 'the actual pay received by an employee for working their normal weekly hours at the time the employee takes long service leave, or ceases employment.

Ordinary pay includes the cash value of any board or lodging that the employee receives from his or her employer.

Ordinary pay doesn't include most allowances, penalty or overtime rates but is the actual ordinary time rate received – even if the employee is a casual employee (note that a casual employee's ordinary rate includes the casual loading).

Ordinary pay is to be averaged in certain circumstances to include other components of pay such as commission.

Example – Lissa

Lissa has worked continuously for 11 years; she wants some work-life balance and decides to resign from her employment. Lissa’s long service leave (LSL) entitlement is calculated as follows:

> 11 years multiplied by 52 weeks = 572 weeks.

> We then need to divide the total weeks by 60, as Lissa will receive one week of LSL for each 60 weeks of service. 572 weeks divided by 60 = 9.5 weeks.

> At the time of resignation, Lissa’s ordinary pay is $1,100.00 per week gross.

> 9.5 weeks multiplied by $1,100.00 per week is $10,450.00 gross.

Lissa is therefore entitled to a payment of $10,450.00 (gross and subject to statutory taxation) on the day her employment ends.

Varied hours – casual and seasonal employment

Legislation

An employee's LSL entitlement is based on their normal weekly hours at the time the leave falls due, or is to be paid out.

In some cases though, an employee's hours may vary from week to week – this may occur in particular for casual, or seasonally engaged employees.

Where an employee's hours have changed during the last 104 weeks (2 years), the employee's hours for calculating long service leave will be averaged over the preceding 52 weeks or the preceding 260 weeks or entire period of employment – whichever average hours are the greater.

Example – Dani

Dani has worked at a dance studio as a casual instructor for the past 10 years. She works according to a roster but depending on lesson schedules, her hours can change from one week to the next. Dani took 52 weeks of unpaid parental leave from February 2016 to February 2017. Dani has not taken any long service leave before, but would like to do so now.

Dani’s hours over the past 10 years have been as follows:

Year Hours worked
2008 600
2009 550
2010 620
2011 640
2012 638
2013 580
2014 655
2015 635
2016 100
2017 550
2018 635
 
Total hours in last 52 weeks 635
Total hours in last 260 weeks 2,575
Total hours worked for the period of continuous employment 6,203
Total weeks worked for the period of continuous employment 520

In the last 52 weeks:

> 635 hours worked plus no hours of paid leave = 635

> 52 weeks minus no weeks of unpaid leave 

> 635 divided by 52 = 12.2 normal weekly hours for the purposes of LSL

In the last 260 weeks:

> 2,575 hours worked plus no hours of paid leave = 2,575

> 260 minus 52 weeks unpaid parental leave = 208

> 2,575 divided by 208 = 12.4 normal weekly hours for the purposes of LSL 

For the entire period of continuous employment:

> 6,203 hours worked plus no hours of paid leave = 6,203

> 520 weeks worked minus 52 weeks of unpaid leave = 468

> 6,203 divided by 468 = 13.3 normal weekly hours for the purposes of LSL

Because Dani’s average weekly hours of work over the entire period of continuous employment is greater than the average weekly hours over either the last 52 or 260 weeks, her normal weekly hours for the purposes of LSL will be 13.3 hours per week (because it is the greatest of the three averages).  

Ordinary hours changed during employment  

Legislation

An employee's LSL entitlement is based on their normal weekly hours at the time the leave falls due – or is to be paid out.

In some cases, an employee's ordinary hours of employment may alter – for example an employee may move from full time to part time employment or vice versa.

Where an employee's ordinary hours have changed in the 104 weeks (2 years) immediately before the employee takes LSL, the employee's hours for calculating LSL will be averaged over the preceding 52 weeks (1 year) or five years or entire period of employment – whichever average hours are the greater.

Example – Sonia

Sonia has been continuously employed as a manager at a restaurant for 8 years. For the first 7 and a half years she worked full time (38 hours per week) but for the last 26 weeks she has worked part time for 24 hours per week. Sonia takes 152 hours of annual leave every year.  

Sonia’s hours for the last 8 years have been as follows:

Year Hours worked
2011 1,824
2012 1,824
2013 1,824
2014 1,824
2015 1,824
2016 1,824
2017 1,824
2018 1,460

Total hours worked in the last 52 weeks 1,460
Total hours worked in the last 260 weeks 8,756
Total hours worked for the entire period of continuous employment 14,228
Total weeks worked for the entire period of continuous employment 416
Hours of paid leave in the last 260 weeks 760
Hours of paid leave for the entire period of continuous employment 1,216

In the last 52 weeks: 

> 1,460 hours worked plus 152 hours of paid leave = 1,612

> 52 weeks minus no weeks of unpaid leave = 52 weeks

> 1,612 divided by 52 = 31 normal weekly (averaged) hours for the purposes of LSL

In the last 260 weeks:

> 8,756 hours worked plus 760 hours of paid leave = 9,516

> 260 minus no weeks unpaid leave = 260 weeks

> 9,516 divided by 260 = 36.6 normal weekly (averaged) hours for the purposes of LSL

For the entire period of continuous employment:

> 14,228 hours worked plus 1,216 hours of paid leave = 15,444

> 416 weeks worked minus no weeks of unpaid leave = 416

> 15,444 divided by 416 = 37.1 normal weekly (averaged) hours for the purposes of LSL

Because Sonia’s average weekly hours of work over the entire period of continuous employment is greater than the average over either the last 52 or 260 weeks, her normal weekly hours for the purposes of LSL will be 37.1 hours per week.  

No ordinary pay

Legislation

An employee's LSL entitlement is based on their ordinary time rate of pay at the time the leave is taken – or is to be paid out.  

In some cases though – where this is permitted by the relevant award or agreement – an employee may not have a fixed ordinary time rate of pay. For example, the employee may be paid:

  • per piece of work
  • per delivery
  • on commission and retainer or base rate.

Non-discretionary commissions and regular bonuses – for example, those based on sales targets – may be counted as part of ordinary pay if they're included in the employee's oral or written contract of employment.

Where an employee's rate of pay varies from week to week, the employee's rate of pay for calculating LSL will be averaged over the preceding 12 months or five years or entire period of employment, whichever average rate is the greater.

Example – Dragan

Dragan is a real estate agent who has worked for the same agency for 8 years. Dragan has resigned from his employment. He did not take any LSL during his employment. 

Dragan’s contract of employment specifies he is paid a retainer of $25,000 per annum, plus commission for sales he has written for the company. In the last five years, Dragan’s retainer did not alter but commission was variable.

Dragan’s ordinary pay over the past five years is as follows:

Year Commission $ Retainer $ Total P.A. $
2011 25,000 50,000 75,000
2012 40,000 50,000 90,000
2013 30,000 50,000 80,000
2014 20,000 50,000 70,000
2015 45,000 50,000 95,000
2016 40,000 50,000 90,000
2017 35,000 50,000 85,000
2018 40,000 50,000 90,000

Total earned in the last 52 weeks $90,000
Total earned in the last 260 weeks (5 years) $430,000
Total earned for the period of continuous employment $675,000
Total weeks worked for the entire period of continuous employment 416 

In the last 52 weeks: 

> $90,00 earned divided by 52 weeks = $1,730.76

In the last 260 weeks:

> $430,000 earned divided by 260 weeks = $1,661.53

For the entire period of continuous employment:

> $675,000 earned divided by 416 weeks = $1,622.59

Because Dragan’s average weekly rate earned over the last 52 weeks is greater than the average over either the last 260 weeks, or the entire period of continuous employment, his ordinary time rate of pay for the purposes of long service leave will be $1,730.76 per week.

If you own, are looking to purchase, or start a small business with under 20 employees, you may be eligible for our Long Service Leave Small Business Information Service (LSLSBIS).

LSLSBIS offers one-on-one information and advice regarding your responsibilities under the Victoria Long Service Leave Act.

To access this program, contact the Wage Inspectorate Victoria by giving them a call on 1800 287 287 or send them an email.

Need further assistance?

Looking for further assistance and advice about long service leave? Email Wage Inspectorate Victoria or call 1800 287 287.

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