Source
r/AusFinance•
vimfan

Calculation of annual leave payout

My job is salaried, with a fixed salary for the year, paid 1`/12 of that monthly. My monthly payslips show a different amount of hours worked each month, depending on the month (due to length of month, and how many working days there were in the month), e.g. March was based on 23 working days, and February was based on 20 working days. Because of this, the hourly rate shown in the payslip varies quite a bit, depending on the month, so that the monthly total remains the same, as my pay is defined in terms of the yearly amount.

I have several hundred hours annual leave accrued (and not far off my 7 years to get long service, as well). If I were to quit and get paid out accrued annual leave (and potentially long service leave if that has triggered), how is the dollar amount calculated for the payout? What hourly rate is used? Does it depend on the month, or is it mandated to use a specific way of calculating the monthly rate? In Victoria if that makes a difference.

Posted Apr 1, 2022, 12:23 AM UTC

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Any-Dot-7951•

I have no knowledge on the subject but to me it would make sense that it's calculated out from (yearly pay)/(52 weeks)/(40 hours). Sub the 40 hours for however many weeks you work a week.

If I was in your position, I'd try to argue it if they tried to pay me less than this, unless anyone can find anything concrete from fairwork/government sites.

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[deleted]•

[deleted]

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notfailingpresuccess•

Sounds like a back end issue of your workplace's payroll software. Have seen this happen before with Xero specifically

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vimfanOP•

Yes, it does seem to be Xero. Is there a standard way hourly rate is supposed to be calculated for salaried employees?

At my last job the payslips had a fixed hourly rate, but the monthly hours were also fixed, so if you subtracted leave taken during the month (also shown on payslip), the remainder didn't technically match the actual hours worked.

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Lipzo•

Divide your annual salary (pre bonus and super) by 1976. 1976 is the standard amount for full time contracts presuming you're at 38 yours per week

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petergaskin814•

Should be annual income divided by 52 divided by 38 hours.

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WizziesFirstRule•

Are you on a contract, award or enterprise agreement?

More than likely it would be in this instrument.

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vimfanOP•

On a contract. It only has the yearly dollar amount, and that is actually out of date now since a few pay rises.

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WizziesFirstRule•

Does it list hours of work (per day, week or months)?

What does it say about annual leave (balance and/or accrual)?

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vimfanOP•

Hours of work says 38 hours per week. Annual leave accrual at 20 days per calendar year (has been accruing pro-rata per month though). No leave loading.

I guess by defining it as hours per week, they would be hard-pressed to explain doing anything other than working out hourly rate in final pay by dividing yearly pay by weeks then hours-per-week.

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WizziesFirstRule•

Yes I think you are spot on.

Do your own calc. Annual salary / 52 / 38 x Annual leave balance (hours).

Ask for an estimate when you are ready to put notice in.

Kick up a fuss if it is less then the your calc.

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Fit_Metal_468•

I think they pick the month with the fewest working days, and base the figure on the maximum rate per hour you can find.

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vimfanOP•

Knowing my boss, I'd expect him to do the opposite so it works out to the lower hourly rate.

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maybeloved•

I'm in a similar situation. I have 300+ hours annual leave to be paid out in a month and also 4.5 weeks of LSL I'm getting from almost 6 years of service. In total I worked it out to be about 14.5 working weeks of pay since I get paid monthly. I worked it out in weeks so I could more easily figure out my budget. I'm using it all to fund my time off until new years as I can get about 2 weeks of rent out of one working week.

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vimfanOP•

Which state are you in? As far as I know, in Victoria at least, you are only eligible for LSL on reaching 7 years.

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ItsMe5891•

Yeah in Vic you need to have completed 7 years to get paid your LSL balance

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maybeloved•

Once you quit, you get paid out. I've quit.

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vimfanOP•

My understanding was that you have to reach 7 years before you can get paid out LSL when you quit. I was at my last job ~6 years and did not get paid out any LSL when I left.

EDIT: Have you received your payout, or notice of it, already?

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