Long service leave in Australia is a type of paid leave granted to employees who have worked continuously for the same employer over a set period of continuous service, usually 7 to 10 years, depending on the state or territory.

Each state and territory has its own legislation outlining how it’s calculated, when it can be taken, and what happens if employment ends before it’s used.

The entitlement period is after how many years the employee is eligible to actually take LSL, and is entitled to an Available Balance. In Victoria, this is generally after 7 years, while in other Australian states, it is after 10 years.

The pro-rata period (previously referred to as the contingent period) is when an employee is between entitlement periods. The Prorated Balance cannot be used for taking leave yet, however must be tracked as it may need to be paid out in instances like termination.

Continuous Service is a period of unbroken, continuous service with the same employer. Paid leave counts as continuous service, though other absences from work may not necessarily count towards long service leave accrual.

Different states have different definitions, and you should consult your state’s specific legislation regarding this topic.

Previously, Tanda tracked Long Service Leave using a regular Leave Type with a flat accrual rate (no different from Annual Leave, for example). This didn’t take into account any entitlement periods or staff eligibility.

Tanda has since introduced the Long Service Leave (calculated) feature for Tanda Payroll, which is built on each state’s legislation regarding LSL and the entitlements employees should receive.

By design, you are not able to edit the accrual rate of Long Service Leave (calculated) leave. This leave type does not typically ‘accrue’, instead assigning balances where necessary, and calculating a prorated balance, per the state’s legislation.

The only case where LSL is expected to accrue each pay run is for employees in Queensland who have reached >15 years of continuous service.

The system will look at the address in the default team for existing profiles in Tanda, and for new profiles, you’ll need to confirm the state in the Long Service Leave tab under the Payroll tab on their profile.

To see when/how staff will be assigned balances, and how they can use and be paid these balances, please see Accruing, Using and Paying Long Service Leave.

Most states treat LSL purely by Weeks, meaning you will be assigned a balance in weeks, use the balance in weeks, and be paid by a weekly rate calculation.

The exception to this is QLD and WA, which may reference weeks in their legislation, but calculate and pay LSL using Hours.

Available Balances:

This is the balance that the employee is currently entitled to, and is only the balance they can take. It is given to employees upon certain employment anniversaries (e.g. 8.6667 weeks upon reaching 10 years in NSW).

Prorated Balances:

This is the balance that the employee can’t take or use yet, however, upon termination of employment, this prorated balance may need to be paid out.

Depending on the state, this can increase continually as weeks pass (e.g. VIC), or by an entitlement on a yearly employment anniversary (e.g. SA).

Liabilities:

LSL liabilities include any balance an employee can currently take, as well as any prorated leave they have. They are a separate concept from an employee’s balance.

Liabilities should be considered estimations for LSL (calculated), since the average number of hours worked in the week, or the average cost for a week, can change at any point if the employee works varied hours.

You can see liabilities broken down in the Long Service Leave Liability Report for your state.

The system automatically recognises when an employee reaches their next Long Service Leave (LSL) entitlement based on their employment start date and state. It then assigns a prorated and/or current balance according to the information available in Tanda.

Weeks-based states will always assign balances in weeks, while hours-based states will always assign balances in hours. For hours-based states, LSL will accrue on the employee’s payslip once their entitlement date is reached. For weeks-based states, the balance is automatically updated in the employee’s profile when the entitlement is reached.

For existing employee profiles in weeks-based states, an available and prorated balance should appear straight away. For existing profiles in hours-based states, the available or prorated balance may not be immediately accurate or populated, and could require manual intervention.

This is because, in some cases, Tanda may not have all the information needed to calculate LSL accurately. For example, if an employee’s full employment history isn’t recorded in Tanda.

This means Tanda may be missing key information, such as total hours worked or previous entitlements received. Because of this, available balances for QLD and WA will only be automatically assigned in payslips that cross the entitlement date.

To see how you can set up or edit your employee’s Long Service Leave balances and liabilities, please see Configuring Long Service Leave.

To see more about how balances are assigned, or how employees can take and are paid LSL, please see Accruing, Using and Paying Long Service Leave.

To read more about how LSL should work in your state, the below links to government guides may prove useful:

QLD:

https://www.business.qld.gov.au/running-business/employing/legal-obligations/long-service-leave/entitlements

NSW:

https://www.nsw.gov.au/employment/rights-responsibilities/leave/long-service-leave

SA:

https://www.safework.sa.gov.au/workers/wages-and-conditions/long-service-leave/calculating-long-service-leave

VIC:

https://www.vic.gov.au/comprehensive-guide-victorian-long-service-leave-act-2018/calculating-long-service-leave

WA:

https://www.wa.gov.au/organisation/private-sector-labour-relations/overview-of-long-service-leave-wa