Key Takeaways at a Glance:
- Australian employers must administer at least seven distinct leave types under the National Employment Standards, and a single compliance gap can trigger back-pay liability across multiple categories at once.
- Casual employees do not accrue paid annual leave or personal leave, but they do receive 10 days of paid family and domestic violence leave from their first day, which catches most international employers off guard.
- The government Paid Parental Leave scheme is expanding toward 26 weeks, with superannuation contributions being added to those payments, creating new payroll obligations that must be tracked and implemented on a rolling basis.
- Long service leave is governed by state and territory law, not the NES, so qualifying periods, durations, and payout rules differ by jurisdiction and represent the most common compliance gap for employers without a local entity.
- Hiring through a Global Employer of Record transfers legal employer obligations, including leave accrual, payslip compliance, award interpretation, and state-specific long service leave tracking, without requiring the company to establish its own Australian entity.
Why Australian Leave Law Demands Attention Before You Hire
Australia's Fair Work Act 2009 and the National Employment Standards (NES) set minimum leave entitlements that apply to almost every employee in the country. Modern awards and enterprise agreements can layer additional entitlements on top of those minimums, but they cannot go below them. For a company accustomed to at-will employment and minimal statutory leave, this represents a significant shift in what it means to be an employer.
Without an Australian entity, international employers cannot legally employ workers in Australia directly. They must either establish a local entity or engage a Global Employer of Record. Either path requires correctly administering every leave category from the first day of employment, across annual leave, personal and carer's leave, compassionate leave, parental leave, family and domestic violence leave, community service leave, and long service leave.
This guide covers each leave category, the payroll mechanics attached to it, the compliance traps that most commonly affect international employers, and the practical options for managing these obligations without setting up a local entity.
Australian Leave Entitlements: The Full Statutory Picture
The table below covers every leave type an Australian employer must administer, including who qualifies, how much leave applies, and whether it is paid or unpaid.
| Leave Type | Entitlement | Paid or Unpaid | Permanent Employees | Casual Employees | Governing Source |
|---|---|---|---|---|---|
| Annual Leave | 4 weeks per year (5 weeks for eligible shift workers) | Paid | Yes | No | NES |
| Personal / Carer's Leave | 10 days per year | Paid | Yes | No | NES |
| Unpaid Carer's Leave | 2 days per occasion | Unpaid | Yes | Yes | NES |
| Compassionate Leave | 2 days per occasion | Paid (permanent); Unpaid (casual) | Yes | Yes | NES |
| Family and Domestic Violence Leave | 10 days per year | Paid | Yes | Yes | NES |
| Parental Leave (NES) | Up to 12 months unpaid, extendable by 12 months | Unpaid | Yes (12 months service required) | No | NES |
| Community Service / Jury Duty Leave | Unpaid for most community service; make-up pay for first 10 days of jury duty | Mostly unpaid | Yes | Yes | NES |
| Public Holidays | 11 national public holidays (additional state holidays may apply) | Paid | Yes | Varies | NES |
| Long Service Leave | Varies by state and territory | Paid | Yes | Varies | State / Territory Law |
The NES sets the floor for every category listed above. Modern awards and enterprise agreements can provide entitlements above those minimums, but they cannot reduce them. An employee covered by an award that provides more generous annual leave loading or additional personal leave days is entitled to the higher amount, not the NES minimum.
Long service leave is the one category the NES does not govern. It sits entirely within state and territory legislation, which means the qualifying period, the duration of leave, and the rules for pro-rata payout on termination all differ depending on where the employee works. For employers with staff across multiple states, this creates a separate compliance obligation for each jurisdiction.
Annual Leave: Entitlements, Accrual, and Payroll Mechanics
Full-time and part-time employees are entitled to 4 weeks of paid annual leave per year under the NES. Eligible shift workers receive 5 weeks. Casual employees receive no paid annual leave. Leave accrues progressively throughout the year and carries over if not taken, meaning an employee who does not use leave in a given year accumulates a balance that the employer must eventually pay out.
Annual leave is paid at the employee's base rate of pay, or at the higher ordinary time earnings rate if that applies under a relevant award or enterprise agreement. Some awards also require a 17.5% annual leave loading on top of the base rate when an employee takes leave. This loading is a payroll line item that international employers frequently overlook when modelling employment costs in Australia.
Annual leave can be cashed out, but only under strict conditions. The employee must retain at least 4 weeks of accrued leave after the cash-out, there must be a genuine written agreement between the employer and employee, and the cash-out must be paid at the full applicable rate. Employers cannot initiate or require a cash-out unilaterally.
Employers can direct an employee to take annual leave if the employee has accumulated an excessive balance, subject to the conditions set out in the relevant award or enterprise agreement. Outside of that, employers cannot unreasonably refuse a leave request from an employee.
On termination, all accrued but untaken annual leave must be paid out at the applicable rate. This is a hard legal obligation under the NES. It applies regardless of the reason for termination and cannot be waived by agreement.
Personal, Carer's, Compassionate, and Family Violence Leave
These four leave types cover the situations employees are most likely to encounter during day-to-day employment. Each has distinct eligibility rules, and the differences between permanent and casual employees matter for payroll setup.
- Personal and carer's leave: 10 days paid per year for permanent employees, accruing progressively. Casual employees do not accrue this leave. Employees must give notice when taking this leave and, if the employer requires it, provide evidence such as a medical certificate.
- Unpaid carer's leave: 2 days per occasion for all employees, including casuals. This applies when paid personal or carer's leave is exhausted or not available to the employee.
- Compassionate leave: 2 days per occasion, paid for permanent employees and unpaid for casuals, when an immediate family or household member dies or suffers a life-threatening illness or injury.
- Family and domestic violence leave: 10 days paid per year, available from the first day of employment, including for casual employees.
Family and domestic violence leave carries a specific payslip compliance requirement that international employers must address before their first hire. Employers must not identify this leave type on payslips in a way that could identify the employee as a victim of family or domestic violence. Payroll systems must be configured to display this leave in a way that protects employee confidentiality. This is a mandatory legal requirement, not a discretionary practice, and it applies from day one of employment.
Parental Leave: NES Unpaid Entitlement and the Expanding Government PPL Scheme
Australian parental leave operates across two separate layers, and employers need to understand both to manage payroll and employee expectations correctly.
The first layer is the NES unpaid entitlement. Eligible employees are entitled to up to 12 months of unpaid parental leave, with the right to request an additional 12 months on top of that. Eligibility requires 12 months of continuous service with the employer. During this period, the employer must hold the employee's position open.
The second layer is the government-funded Paid Parental Leave (PPL) scheme. This is a separate payment funded by the Australian government, not the employer. The scheme is being expanded in phases, with the goal of reaching 26 weeks of government-funded paid parental leave. Employers need to understand how this scheme works because it interacts with any employer-funded top-up arrangement and affects payroll administration during the leave period.
A new obligation is being introduced as part of the PPL expansion: superannuation contributions will be paid on government-funded PPL payments. This is an employer-adjacent obligation that payroll providers must track and implement as each phase of the expansion takes effect.
The PPL expansion is an active policy change as of 2025. Before making commitments to employees about parental leave entitlements, verify the current phase and applicable rules with the Fair Work Ombudsman or the employer's Global Employer of Record.
Long Service Leave: State-by-State Rules and Compliance Risk
Long service leave is the most variable and most frequently mismanaged leave obligation for international employers in Australia. Unlike every other leave type covered in this guide, long service leave is not governed by the NES. It sits entirely within state and territory legislation, and the rules differ by jurisdiction.
The key variables that differ across states and territories include the qualifying period before an employee becomes entitled to long service leave (typically ranging from 7 to 10 years depending on the jurisdiction), the duration of leave once the qualifying period is met, and whether pro-rata entitlements apply if an employee resigns or is terminated before completing the full qualifying period. Exact figures should be verified against current state legislation before making any commitments to employees, as these rules are subject to legislative change.
For an employer with employees working in more than one state or territory, this means tracking and administering a separate set of rules for each jurisdiction. A single payroll configuration will not cover the full workforce. This is the most common compliance gap for international employers who assume that one federal standard applies across the country.
Qualifying periods and entitlement durations vary by state and territory. Employers should consult the relevant state or territory legislation directly to confirm current requirements before employing workers in Australia.
Public Holidays, Community Service Leave, and Casual vs Permanent Entitlements
Australia has 11 national public holidays under the NES, with additional public holidays set by individual states and territories. Employees who work on a public holiday are generally entitled to penalty rates or a substitute day off, depending on the conditions in their award or enterprise agreement.
Community service leave covers jury duty and other eligible community service activities. Most community service leave is unpaid. The exception is jury duty, where employees are entitled to make-up pay for the first 10 days. Make-up pay covers the difference between the jury duty payment received from the court and the employee's ordinary pay for that period.
The distinction between casual and permanent employees runs through almost every leave category in Australian law. The table below summarises where the two employment types diverge on the leave types covered in this section.
| Leave Type | Permanent Employees | Casual Employees |
|---|---|---|
| Public Holidays | Entitled (paid) | Varies by award |
| Community Service / Jury Duty | Entitled (make-up pay for first 10 days of jury duty) | Entitled |
| Family and Domestic Violence Leave | 10 days paid from day one | 10 days paid from day one |
| Unpaid Carer's Leave | 2 days per occasion | 2 days per occasion |
| Compassionate Leave | 2 days paid per occasion | 2 days unpaid per occasion |
Understanding the casual versus permanent distinction matters before the first hire. Misclassifying a worker as casual when they have a regular and systematic work pattern can expose the employer to back-pay claims across multiple leave categories simultaneously.
For international employers managing these obligations without a local entity, a Global Employer of Record explained covers how the legal employer model works in practice. To understand what employment in Australia costs under this model, see Gloroots pricing. For a full overview of how Gloroots manages Australian employment compliance, visit the Gloroots EOR services page.
How Gloroots Manages Australian Leave Compliance for International Employers
Employing someone in Australia without a local entity means taking on every NES obligation, every award interpretation, and every state-specific long service leave rule from day one. For a company without an internal HR or legal team familiar with Australian employment law, that is a significant compliance exposure to carry.
Gloroots operates as a Global Employer of Record in Australia. The company becomes the legal employer on record, which means Gloroots manages leave accrual, payslip compliance, award interpretation, and state-specific long service leave tracking across every jurisdiction where the workforce operates. The client company directs the work. Gloroots governs the employment relationship.
This model provides local execution with centralized governance. Leave entitlements are administered correctly from the first payroll run. Payslip configurations for family and domestic violence leave meet the confidentiality requirements without requiring the client to configure their own payroll system. Long service leave obligations are tracked by state, not applied as a single national rule. Superannuation obligations, including the new contributions on government-funded PPL payments, are managed as part of the employment operating layer.
Gloroots provides predictable, country-specific pricing so the full cost of Australian employment is visible before the hire is made. There are no separate compliance fees added after onboarding. The employment lifecycle, from contract to termination payout, is managed within a single platform with human-led operations supporting each account.
Frequently Asked Questions
Do casual employees in Australia get any paid leave?
Casual employees do not accrue paid annual leave or paid personal and carer's leave. They are, however, entitled to 10 days of paid family and domestic violence leave per year from their first day of employment. They also receive 2 days of unpaid carer's leave per occasion and 2 days of compassionate leave per occasion, though the compassionate leave is unpaid for casuals rather than paid.
Can an employer cash out an employee's annual leave in Australia?
Yes, but only under strict conditions. After the cash-out, the employee must retain at least 4 weeks of accrued annual leave. There must be a genuine written agreement between the employer and the employee. The cash-out must be paid at the full applicable rate. Employers cannot initiate or require a cash-out unilaterally.
How does long service leave work and does it vary by state?
Long service leave is governed by state and territory legislation, not the NES, so the qualifying period, duration, and payout rules differ by jurisdiction. There is no single federal rule that applies across the country. Employers with workers in multiple states must track and administer a separate set of obligations for each, which is the most common compliance gap for international employers operating in Australia.
What is the current Paid Parental Leave entitlement and how is it changing?
Under the NES, eligible employees are entitled to up to 12 months of unpaid parental leave, with the right to request an additional 12 months. Separately, the Australian government funds a Paid Parental Leave scheme that is being expanded in phases toward 26 weeks of government-funded paid leave. The expansion is ongoing as of 2025. Verify the current phase and applicable rules with the Fair Work Ombudsman before making commitments to employees.
Are employers required to pay superannuation on Paid Parental Leave?
Superannuation contributions on government-funded Paid Parental Leave payments are being introduced as part of the phased PPL expansion. This is a new obligation that employers and their payroll providers must track and implement as each phase takes effect. Verify the current status with the Fair Work Ombudsman or your Global Employer of Record before the next payroll run.
What are the payslip rules for family and domestic violence leave?
Employers must not identify family and domestic violence leave on payslips in a way that could identify the employee as a victim. Payroll systems must be configured to display this leave in a way that protects employee confidentiality. This is a mandatory compliance requirement under Australian law, not a discretionary practice, and it applies from the first day of employment.
Can an employer refuse an annual leave request in Australia?
Employers cannot unreasonably refuse an annual leave request. They can direct employees to take annual leave if the employee has accumulated an excessive leave balance, but this is subject to the conditions set out in the relevant award or enterprise agreement. Outside of that mechanism, a blanket refusal of a reasonable leave request is not permitted.
How do public holidays work for employees who work on the day?
Australia has 11 national public holidays under the NES, with additional public holidays set by individual states and territories. Employees who work on a public holiday are generally entitled to penalty rates or a substitute day off, depending on the conditions in their award or enterprise agreement.
What happens to unused annual leave when an employee is terminated?
All accrued but untaken annual leave must be paid out to the employee on termination at the applicable rate. This is a hard legal obligation under the NES. It applies regardless of the reason for termination and cannot be waived by agreement between the employer and employee.
How does hiring through an EOR affect leave compliance obligations in Australia?
When a company hires through a Global Employer of Record, the EOR becomes the legal employer in Australia and takes on all NES leave obligations, award interpretation, payslip compliance, and state-specific long service leave tracking. The client company directs the work. The EOR manages the employment relationship and all associated compliance obligations, including leave accrual and termination payouts.
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