How to Calculate Employee Leave Accrual: Annual, Personal & Long Service
Master leave accrual calculations for Australian employees. Covers annual leave accrual formulas, personal/carer's leave, part-time pro-rata calculations, leave loading obligations, and leave payout on termination — with worked examples and free calculators.
Annual leave accrual formula: 4 weeks per year of service
Under the National Employment Standards, full-time employees accrue 4 weeks (152 hours for a 38-hour week) of paid annual leave per year of continuous service. Leave accrues progressively throughout the year based on ordinary hours worked — not in a lump sum on each anniversary. The standard accrual formula is: annual leave accrued = (ordinary hours worked / 38) x (4 / 52) hours per week. For a full-time employee working 38 hours per week, this equals approximately 2.923 hours per week or 0.0769 hours per ordinary hour worked. Some modern awards provide for 5 weeks of annual leave — notably the shift work provisions in awards like the Manufacturing and Associated Industries Award, where employees who are regularly rostered to work Sundays and public holidays are entitled to an extra week. Leave accrues during paid leave (annual leave, personal leave, long service leave) but does not accrue during unpaid leave or unpaid parental leave. Accrued annual leave accumulates from year to year — there is no 'use it or lose it' provision in Australian law, and employers cannot force employees to forfeit unused leave. Use our Leave Calculator to model accrual for any employment type and period.
Personal/carer's leave accrual
Full-time employees accrue 10 days (76 hours) of paid personal/carer's leave per year under the NES. This leave can be used for personal illness or injury, or to care for a member of the employee's immediate family or household who is ill, injured, or experiencing an unexpected emergency. Like annual leave, personal leave accrues progressively — approximately 1.461 hours per week for a full-time employee. Personal leave accumulates from year to year without limit and does not expire. However, unlike annual leave, personal leave is not paid out on termination of employment. Employers can require evidence of illness (such as a medical certificate or statutory declaration) for absences of one day or more, or if the absence falls on a day adjacent to a weekend or public holiday — check your specific award for evidence requirements. Employers cannot direct employees to take personal leave or cap the accumulation of personal leave balances. For record-keeping purposes, you must track each employee's personal leave balance, including the dates and duration of all leave taken, the reason (personal illness or carer's leave), and any evidence provided.
Part-time pro-rata calculations
Part-time employees receive the same leave entitlements as full-time employees, but calculated on a pro-rata basis according to their ordinary hours. The formula is straightforward: part-time leave entitlement = full-time entitlement x (part-time ordinary hours / 38). For example, a part-time employee working 20 hours per week accrues annual leave of 4 weeks x (20 / 38) = 4 weeks of 20-hour weeks, which equals 80 hours per year. Their personal leave accrual would be 10 days x (20 / 38) = approximately 5.26 days of 20-hour days, or 40 hours per year. When a part-time employee takes a day of leave, it is counted based on the hours they would have worked that day. If a part-time employee normally works 6 hours on a Wednesday and takes that day as annual leave, 6 hours is deducted from their leave balance — not 7.6 hours (the full-time equivalent). This distinction is important and commonly misapplied. If a part-time employee's hours change during their employment, leave continues to accrue at the new rate going forward — there is no retrospective adjustment. Use our Leave Calculator with the part-time hours input to calculate exact accrual amounts for any work pattern.
Leave loading obligations
Leave loading is an additional payment made to employees when they take annual leave. Under many modern awards, employees are entitled to a leave loading of 17.5% on top of their base rate of pay during annual leave. The loading was historically intended to compensate employees for the loss of overtime and penalty rate earnings while on leave. Not all awards include leave loading — check your specific award. Where an award provides leave loading, it applies to the base rate of pay (excluding allowances, penalties, and overtime) for the period of annual leave taken. Some awards offer employees a choice between leave loading and the penalty/overtime rates they would have earned had they worked — the employee receives whichever is higher. For employees on an annualised salary arrangement under their award, the annualised salary may already incorporate leave loading — check the specific annualised salary provisions of the award to avoid double-counting. On termination, some awards require that unused annual leave be paid out inclusive of leave loading, while others do not — this is one of the most commonly contested points in final pay disputes. Check your award carefully and document your approach.
Leave payout on termination: what you must pay
When employment ends — whether through resignation, termination, redundancy, or end of contract — the employer must pay out all accrued but untaken annual leave in the final pay. This is a non-negotiable NES entitlement. The payout is calculated at the employee's base rate of pay at the time of termination, plus leave loading if applicable under the award. Long service leave is also paid out on termination if the employee has reached the qualifying period (which varies by state — typically 7-10 years, with some states allowing pro-rata payout after 5-7 years). Personal/carer's leave is never paid out on termination, regardless of the balance. For the purposes of calculating accrued annual leave on termination, include leave that has accrued up to and including the last day of employment (which includes any notice period, whether worked or paid in lieu). If the employee has taken leave in advance (i.e., more annual leave than they had accrued), the employer can deduct the overpayment from the final pay, but only if the award or employment contract permits it. Use our Leave Calculator and Notice Period Calculator together to determine the total termination payout, including leave accrual during the notice period.
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General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.
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