How a long service payment is calculated
How we calculate a long service leave payment, including the formula that we use.
Long service leave payment formula
The formula that we use to calculate the amount the Corporation (LSC) pays to a worker for long service leave is:
P = 0.8667 x (D ÷ 365) x R
P is the gross payment amount to the worker.
D is the days of service claimed.
R is the highest average ordinary rate of pay.
Calculating a payment using your average ordinary wage
To work out the average ordinary weekly wage for a long service leave payment (R in the above formula), we look at the amounts reported by your employer and calculate the following.
Your average ordinary weekly wage over:
- the 2 most recent quarters of service
- the 4 most recent quarters of service
- the 20 most recent quarters of service
- the 28 most recent quarters of service.
Of those 4 figures, the highest amount will be used to calculate the long service leave payment.
For example, Jane has worked in the community services industry for 7.5 years and can make a claim for long service leave as she has worked more than 7 years since the commencement of the scheme.
Jane’s payment is calculated on the highest of the average of her ordinary weekly wages per below calculations:
- the 2 most recent quarters - $1,841.23
- the 4 most recent quarters - $1,841.23
- the 20 most recent quarters - $1,719.24
- the 28 most recent quarters - $1,662.32.
Jane’s highest ordinary weekly wage is for the periods (1) and (2) $1,841.23.
Jane’s payment is calculated at 0.8667 x (2738 days ÷ 365) x $1,841.23 = $11,970.66.
Note: In accordance with Australian Taxation Law, tax is withheld by LSC for Worker claims, this will be reported to the ATO via Single Touch Payroll (STP). LSC is unable to provide advice on taxation and suggests Workers seek taxation advice from a professional financial advisor.
