Sick leave accrual refers to the process by which employees gradually earn paid sick leave based on the number of hours they work. In Australia, under the National Employment Standards (NES), full-time and part-time employees are entitled to accrue sick leave, officially called personal/carer’s leave—progressively throughout the year.
This leave can be used when an employee is unwell, injured, or caring for a sick family or household member. Effective sick leave accrual ensures that employees have access to paid time off when needed and helps employers comply with Fair Work obligations.
Fair Work – Paid Sick and Carer’s Leave
Under the NES:
For example, a full-time employee working 38 hours per week accrues approximately 76 hours of personal leave annually (10 × 7.6 hours).
Sick leave begins accruing from the first day of employment, even during the probation period. The accrual is continuous and occurs during any period the employee is actively working or on paid leave (e.g., annual leave or previous sick leave). However, it does not accrue during unpaid leave (such as unpaid parental leave).
This progressive accrual method ensures employees build their leave balances gradually, offering them paid protection for unexpected health-related absences.
Employers must calculate accrual based on an employee’s ordinary hours of work. Here’s a simplified formula:
(Number of ordinary hours worked per week ÷ 38) × 76 hours = annual sick leave entitlement in hours
For example:
Employers should use payroll software that automatically calculates and tracks accruals to ensure accuracy and compliance.
Yes, unused sick leave rolls over from year to year. There is no cap on how much sick leave an employee can accumulate. However, any accrued balance is not paid out when the employment relationship ends unless specified in the employment contract or award.
This rollover feature ensures that employees with long tenures can build up a buffer of leave for serious or extended illnesses.
When an employee takes approved sick leave, the hours taken are deducted from their accrued balance. Employers must record:
If the accrued balance is exhausted, employees may:
Microkeeper’s HR platform automates sick leave accrual and makes it easier for both employees and employers to manage leave efficiently and compliantly. With Microkeeper, you can:
This level of automation reduces the risk of manual errors and ensures compliance with NES requirements.
Explore Microkeeper's Leave Management Tools
Casual employees do not accrue paid sick leave. However, they may be entitled to 2 days of unpaid carer’s leave per occasion. Their casual loading, usually 25%, compensates for the lack of paid leave entitlements.
No. Employees can only use the leave they have accrued unless the employer agrees to advance future leave.
No. Under Australian law, accrued sick leave cannot be capped.
Typically no, unless an employment contract, enterprise agreement, or award provides for it.
To comply with sick leave accrual laws, employers must:
Non-compliance may result in penalties or back payments during a payroll audit or Fair Work inspection.
Sick leave accrual is more than just a technical payroll function—it’s a fundamental employee right and a key aspect of workforce wellbeing. Businesses that manage it transparently and accurately not only meet their legal obligations but also foster trust, loyalty, and long-term staff retention. Leveraging automated tools like Microkeeper can ensure seamless compliance and empower HR teams to focus on people, not paperwork.
Disclaimer: This information is provided for general guidance only and does not constitute legal or industrial relations advice. Please refer to the Fair Work Ombudsman or a legal professional for personalised assistance.
