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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

Long Service Leave changes coming 1 November 2018

The Long Service Leave Act 2018 will come into effect on 1 November 2018 and supersede the 1992 Act. 

These changes include:

  • greater flexibility for women, families and people transitioning to retirement
  • access to long service leave after seven years, not ten
  • allowing employees to take long service leave in smaller increments (i.e. for any period of one day or more)
  • most absences from work do not break continuous employment
  • unpaid leave, including parental leave, counts towards long service leave
  • increased penalties for employers who do not keep records or do not produce them when requested. 

This website, including Long Service Leave calculator, will be updated to reflect those changes on 1 November.

Read the Long Service Leave Act 2018 FAQs

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.

Use the long service leave calculator

The Victorian Government's online calculator assists both employees and employers covered by the State Long Service Leave (LSL) Act 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.

Keep in mind that although the calculator provides fairly accurate answers, they should be verified by an independent party, such as the payroll office, your union or a legal adviser.

Use the long service leave (LSL) 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 and has their long service leave paid out'.
  • 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). 

Example – My Linh

My Linh has worked continuously for 11 years and decides to resign from employment. My Linh's long service leave entitlement is calculated by following the steps:

  • 11 years multiplied by 52 weeks = 572 weeks.
  • Divide the total weeks by 60 – as My Linh will receive one week of long service leave for each 60 weeks of service – 572 weeks divided by 60 = 9.53 weeks.
  • At the time of resignation, My Linh's ordinary pay is $500.00 per week gross. 9.53 weeks multiplied by $500.00 per week is $4,765.00 gross.

My Linh is therefore entitled to a payment of $4,765.00  – gross and subject to statutory taxation – on the day her employment ends.

Varied hours – casual and seasonal employment

Legislation

  • An employee's long service leave 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 vary from week to week, the employee's hours for calculating long service leave will be averaged over the preceding 12 months or the preceding five years – whichever average hours are the greater.

Example – Melinda 

Melinda has worked at a shoe shop as a casual for the past 22 years. 

She works according to a roster – depending on how busy the shop is, she works a different amount of hours week-to-week. Melinda hasn't taken any long service leave before, but would like to do so now.

Melinda's hours over the past five years are shown in the table below:

Year Hours worked Average number of hours worked per week (number of hours divided by 52
1 220 4.23
2 200 3.8
3 240 4.6
4 210 4.0
5 230 4.4
Average over 5 years 220 (total hours worked over 5 years divided by 5 4.2 (total average hours divided by 5)

Melinda's long service leave should therefore be calculated based on the average weekly hours over the past 12 months (year 5), and she will be entitled to long service leave based on 4.4 ordinary hours per week.

Ordinary hours changed during employment  

Legislation

  • An employee's long service leave 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 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 12 months immediately before the employee takes long service leave, the employee's hours for calculating long service leave will be averaged over the preceding 12 months or five years – whichever average hours are the greater.

Example – Danielle

Danielle has been continuously employed for 16 years. However, she worked full time (38 hours) for the first 15 years of employment, and then part time for 20 hours per week in the 16th year.

Danielle's ordinary hours over the past five years are shown in the table below:

Year Hours worked per week
1 38
2 38
3 38
4 38
5 20
Average over 5 years 34.4 (calculated by adding up the hours worked each week for the past 5 years and dividing by 5)

If Danielle's hours are averaged over the last 12 months of employment (year 5), her long service leave would be calculated at 20 hours per week. However, if her hours are averaged over the previous five years, her entitlement to long service would be based on 34.4 hours per week.

Danielle's long service leave should therefore be calculated based on 5-year average weekly hours.

No ordinary pay

Legislation

  • An employee's long service leave 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 long service leave will be averaged over the preceding 12 months or five years, whichever average rate is the greater.

Example – Dragan

Dragan is a real estate agent who has worked for the same agency for 11 years. Dragan has resigned from his employment and he didn't take any long service leave during the course of his employment. 

Dragan's contract of employment specifies he is paid a retainer of $25,000 per annum, plus commission for sales he has made for the company. 

In the last five years, Dragan's retainer did not alter – but his commissions were variable.

Dragan's ordinary pay over the past five years has varied as shown in the table below:

Year $ Comission $ Retainer $ Total p.a. Average weekly rate/year (total income divided by 52)
1 12 000 25 000 37 000 $711.54
2 10 000 25 000 35 000 $673.08
3 15 000 25 000 40 000 $769.23
4 8 000 25 000 33 000 $634.62
5 6 000 25 000 31 000 $596.15
Total average yearly pay for last 5 years.      

$676.92 (calculated by first adding together the average weekly rate for the past 5 years and then dividing by 5.


If Dragan's ordinary weekly rate of pay is averaged over the last 12 months (year 5) of employment, his long service leave would be calculated on the basis of his ordinary weekly pay being $596.15.

However, if his ordinary weekly rate of pay is averaged over the previous five years of employment, his entitlement to long service leave would be based on an ordinary weekly rate of pay of $676.92.

Dragan's long service leave should therefore be calculated based on the average weekly rate over the past five years, and he will be entitled to long service leave based on an ordinary weekly rate of $676.92.

Need further assistance?

Looking for further assistance and advice about long service leave? Give Wage Inspectorate Victoria a call on 1800 287 287.

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