Annual Leave - AU

About

All employees except casuals qualify for Annual and Sick Leave. The requirements for this are explained on the FairWork website (https://www.fairwork.gov.au/leave/annual-leave and https://www.fairwork.gov.au/leave/sick-and-carers-leave/paid-sick-and-carers-leave).

For those employees who are entitled to Leave, an amount is added to their leave balance for each hour they work. This is enabled by setting the rate at which they accrue Annual and Sick leave on qualifying* Pay Code Items. When an employee comes to take leave then they are paid with special Pay Code Items that will reduce their leave balance.

Accrual rate

If an employee is entitled to 4 weeks of Annual Leave a year and works 52 weeks in that year, then their rate is 4/52 = 0.07692. Likewise, if they receive 2 weeks of Sick Leave per annum their rate is 2/52 = 0.03846.

What type of work qualifies for leave?

Normal work hours (typically paid as "Normal Hours") and Annual Leave and Sick Leave all qualify. NB. while on leave an employee accumulates further leave. Accruing leave is based on 2 weeks or 4 weeks of normal work hours per annum, hence there is no accrual for Time and 1/2, Double Time, etc.

How to use

Set the Leave Factors First

Settings used to pay leave

When the below Pay Code Items are used to pay an employee Annual, Sick or RDO Leave hours the system will know to deduct those hours from their relevant leave balance.

• Navigate to System > Set Up > Pay Code Item Editor and Add Item. Create an Item called "Annual Leave Payment" (or similar), setting the Config Type to "Leave" and the Leave type to "Annual".

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• Add a second Item called "Sick Leave" (or similar), setting the Config Type to "Leave" and the Leave type to "Sick".

• Add a third Item called "RDO" (or similar), setting the Config Type to "Leave" and the Leave type to "RDO".

Settings used to accumulate leave

Every employee entitled to leave must use a Pay Code that is set to accumulate leave at the correct rate.

• Create or edit a Pay Code, either by System > Global Pay Codes or by selecting the Pay Codes tab on a client record.

• Select the Pay Code Item "Normal Hours", or add it if it doesn't already exist.

• Scroll down and set the accrual rates for Annual Leave Rate, Sick Leave Rate and RDO Rate.

Example:

Janice works at Healthy Foods Pty on a Pay Code "Line Manager". This Pay Code has the Pay Code Items of Normal Hours, Time and a Half, Annual Leave, Meals. Both Normal Hours and Annual Leave are set to accrue Annual Leave at a rate of

Paying Annual or Sick Leave

This is the same as a normal pay employee procedure - i.e. enter the hours you wish to pay against the pay code item for the Annual or Sick pay.