Leave balance

What Is a Leave Balance?

A leave balance refers to the total amount of paid or unpaid leave an employee has accrued and is entitled to take. This includes various forms of leave such as annual leave, personal/carer’s leave, long service leave, and other types of entitlements defined by the National Employment Standards (NES), modern awards, enterprise agreements, or individual employment contracts.

In Australia, leave balances are a critical part of employee entitlements and must be tracked accurately by employers to ensure compliance with the Fair Work Act 2009 and to maintain fair workplace practices.

Fair Work – Paid Leave Entitlements

Types of Leave Typically Tracked in a Leave Balance

1. Annual Leave
   • Accrues progressively during the year based on ordinary hours worked
   • Standard entitlement is 4 weeks per year for full-time employees
   • Can be taken as time off or paid out under specific circumstances
2. Personal/Carer’s Leave
   • Commonly referred to as sick leave
   • Full-time employees are entitled to 10 days per year, accruing over time
   • Used for illness, caring responsibilities, or medical emergencies
3. Long Service Leave
   • Varies by state or territory
   • Typically becomes available after 7–10 years of continuous service
   • Often expressed in weeks (e.g., 8.67 weeks after 10 years in Victoria)
4. Parental Leave
   • Leave entitlements following the birth or adoption of a child
   • Unpaid leave available for eligible employees
   • Does not accrue like other leave types but is still included in leave records
5. Family and Domestic Violence Leave
   • From 1 February 2023, full-time, part-time, and casual employees are entitled to 10 days of paid leave per year
   • Available immediately and resets each year
6. Time in Lieu (TOIL) / Rostered Days Off (RDOs)
   • Common in flexible working arrangements or industries like construction and healthcare
   • May not accrue under NES but often tracked and stored as leave balance in workplace systems

Why Leave Balances Matter

Leave balances ensure transparency and compliance with workplace laws. For employees, they offer peace of mind and access to time off when needed. For employers, accurate leave balance tracking reduces legal risk, improves scheduling, and helps maintain employee satisfaction and productivity.

Benefits of Accurate Leave Balances

For Employees:

• Easy to understand how much leave is available
• Plan holidays and personal time with confidence
• Encourages fair access to entitlements

For Employers:

• Reduces disputes or confusion over leave usage
• Supports workforce planning and rostering
• Ensures compliance with Fair Work requirements and payroll audits

How Leave Accrual Works

Leave accrual is calculated based on ordinary hours worked. For example:

• An employee working 38 hours per week will accrue 4 weeks of annual leave, which is approximately 2.923 hours per week.
• For part-time workers, leave accrues on a pro-rata basis based on their agreed working hours.

Leave must continue accruing when an employee is on paid leave, such as annual leave or personal leave, but generally not during unpaid leave, unless otherwise specified in an award or agreement.

Fair Work – Annual Leave Accrual

Employer Obligations

Under the Fair Work Act, employers are required to:

• Keep accurate records of leave accruals and balances for each employee
• Include leave balances in payslips if specified in an award or agreement
• Honour leave entitlements and pay them out on termination (except for some unpaid leave types)
• Provide access to leave records if requested by employees

Failure to maintain accurate leave balances can result in penalties or legal disputes.

How Microkeeper Tracks Leave Balances

Microkeeper’s HR and payroll software helps businesses accurately track and manage leave balances in real time. Key features include:

• Live leave accruals based on employee hours
• Automatic award interpretation for correct leave entitlements
• Employee self-service portal for leave requests and balance visibility
• Leave calendar integration with rostering tools
• Reporting tools to help managers plan staffing and leave coverage

Explore Microkeeper’s Leave Management Tools

FAQs About Leave Balances

Can leave balances go negative?

‍In some workplaces, yes, if approved in advance. However, employers are not required to allow negative balances unless specified in a policy or agreement.

Do leave balances carry over year to year?

‍Yes, in most cases. For example, annual leave and personal leave balances roll over unless a cap or expiry is specified in an agreement.

What happens to leave balance on termination?

‍Accrued unused annual leave must be paid out. Personal/carer’s leave is generally not paid out. Long service leave entitlements may be paid depending on the jurisdiction.

Are leave balances shown on payslips?

‍Not always mandatory, but many awards require leave balances to appear on payslips. It’s also a best practice to promote transparency.

Final Thoughts

Tracking leave balances is more than just a payroll task, it’s a vital component of employee wellbeing and employer compliance. Clear visibility and accurate management of leave ensure fair workplace practices, reduce misunderstandings, and support healthy work-life balance for everyone.

By using an integrated platform like Microkeeper, businesses can automate leave tracking, reduce admin burden, and improve employee satisfaction.

_{Disclaimer: This article is intended for general information only. For legal or industrial relations advice, please consult a qualified employment lawyer or the Fair Work Ombudsman.}