Leave entitlements: annual, personal and long service

Annual leave

Permanent full time and part time employees accrue paid annual leave under the National Employment Standards, with part timers accruing pro rata according to their hours. Leave builds progressively through the year and unused leave carries over; it doesn't expire, and whatever's untaken gets paid out on termination. Some awards and agreements add leave loading on top of the base rate when leave's actually taken.

Awards and agreements can also set rules around when leave gets directed, cashed out or taken in advance. Cashing out in particular has strict conditions, including written agreement and minimum remaining balances, so treat it as a rule check rather than something you agree to informally. Current specifics sit on the Fair Work Ombudsman site.

Personal and carer's leave

Paid personal and carer's leave covers an employee's own illness or injury and time spent caring for an immediate family or household member. Like annual leave, it builds progressively for permanent employees and unused balances carry over year to year. Unlike annual leave, it generally isn't paid out on termination.

You can ask for reasonable evidence, a medical certificate say, where the award, agreement or workplace policy allows it. There are related entitlements too under the National Employment Standards, including compassionate leave and unpaid carer's leave for casuals; the Fair Work Ombudsman publishes the full set if you need to check.

Long service leave

Long service leave differs from the other two in an important way: state and territory legislation governs it, not the National Employment Standards, and the rules genuinely differ across the country. Qualifying periods, accrual rates, pro rata entitlements on termination and even how continuous service gets measured all vary by jurisdiction, and some industries run portable long service schemes on top.

Because of that variation, we're not stating any specific years or rates here. If you've got employees approaching long service, check the legislation for your state or territory, or the portable scheme for your industry, and make sure your payroll records can demonstrate continuous service if asked.

Where employers go wrong

• Setting up part timers with full time accrual rates, or the reverse, so balances drift from day one
• Paying casuals leave, or converting a casual to permanent without switching their leave settings over
• Letting informal leave, days in lieu and the like, live outside the payroll system untracked
• Ignoring long service leave until an employee asks about it, then discovering the records can't prove continuous service
• Never reconciling leave balances, so termination payouts end up resting on numbers nobody's checked

Keeping accruals accurate

Accuracy here is mostly a setup and discipline question. Configure each employee's leave types to match their employment type and hours, process every absence through payroll rather than around it, and reconcile balances periodically against what you'd expect. When hours change, update the accrual settings that same day. If you use timesheets, make sure approved leave flows into the pay run automatically instead of getting keyed in twice.

It's worth reviewing large balances with employees directly too. Encouraging people to actually take their leave shrinks the liability, and most people do better work for having had a proper break.

Where NextEra fits

NextEra's managed payroll keeps leave accruals set up correctly and processed consistently, so the balances mean something when you need them for a payout, a provision or a sale. If you suspect your current balances are wrong, a Strategic Finance Review can include a leave reconciliation as part of checking the overall health of your payroll records.