In this section we explain how Long Service Leave Accruals are calculated and displayed in a Payslip.
How does Easy Payslip calculate Long Service Leave Accruals?
Leave accruals are calculated based on the following criteria
- The employee has been set up as having Long Service Leave entitlements
- Refer Help Guide 'How to Edit Employee Entitlement Details' on how to do this
- The employee works 'Applicable' hours
Applicable hours that are included in the calculation for leave accruals are:
- Base Hourly Rate
- Additional Base Rate 1
- Additional Base Rate 2
- Additional Base Rate 3
- Additional Base Rate 4
- Annual Leave Pay
- Sick Leave Pay
- Personal Leave Pay
- Long Service Leave Pay
Hours and/or payments that are not included in the calculation for leave accruals are:
- Overtime (any option)
- Taxable Allowances (any option)
- Untaxed Allowances (any option)
- Annual Leave Loading
The Payslip example below shows this in more detail
As can be seen in the above example, 36.50 hours will be used in determining the hours accrued for this pay period.
Let's look at the Accrual calculation in more detail
Step 1 - Confirm Opening Balance of Accrued Hours
To demonstrate how Accruals are calculated and displayed in a payslip, we will assume the following details were entered at the time of setting up the Employee
Step 2 - Determine Applicable Hours
As shown in the example above, this is 36.50 hours this period.
Step 3 - Calculate Accrued Long Service Leave Hours this period
Long Service Leave is accrued at the rate of 1.6667% of each applicable hour your employee works. (This provides 8.66 weeks every 10 years, based on a 38 hour week)
For this particular period, the calculation for Long Service Leave Accrual will be as follows:
= Applicable Hours x Accrual Rate = Accrued Hours this period
= 36.50 x 1.6667% = 0.61 Hours.
Therefore 0.61 hours of Long Service Leave will have been accrued by the Employee this pay period.
Step 4 - Deduct Long Service Leave Hours taken this period
As shown in the example above, the employee took 1.75 hours of Long Service Leave this period.
Step 5 - Determine the Closing Long Service Leave Hours Balance
The closing Long Service Leave hours balance at the end of payslip 1 would be calculated as follows:
Therefore at the end of Payslip 1, the employee would have -1.15 hours of Long Service Leave owing.
This would be shown in the Payslip as:
Step 6 - Repeat from Step 1 next Payslip
Easy Payslip will continually calculate and display the updated accrued hours in each payslip.
For example, if we assume your employee works a 38 hour week for their second payslip (with no Leave taken), they will accrue 0.63 hours of Long Service Leave (38 hours x 1.6667% = 0.63).
Their Closing Balance at the end of the Payslip 2 would therefore be -0.52 hours as shown below:
Other points to Note
Your employee can have a negative Leave Entitlements Balance.
- The system will not stop you from inputting more hours in a payslip than the employee's closing long service leave hours balance
- There are no limits on the hours accrued
- Your employees can accrue and/or take as much leave as you need
- If Long Service Leave is selected in the Employee set up, then it will be displayed in the Entitlements section on the Payslip