Managing people

Full-time to part-time: how to calculate annual leave

When an employee’s status changes from full-time to part-time, how do you calculate future annual leave and ensure compliance with the National Employment Standards (NES)? 

17 September 2021

 

If an employee works full-time, the standard NES entitlement is four weeks’ annual leave per year. But what if the employee transfers to part-time, and working hours are reduced, for example from 38 to 24 per week? 

Annual leave (as well as personal/carer’s leave) accrues according to the employee’s ordinary hours of work. So under the NES, an employee accrues the equivalent of four weeks’ annual leave per year of service. 

Where the employee changes from full-time to part-time, they don't lose the leave already accrued, although the future rate of accrual will be different, based on the new weekly number of ordinary hours (24 in this case). 

Section 87(2) of the Fair Work Act states that leave accrues progressively according to an employee’s ordinary hours of work and accumulates from year to year. This means the employee’s ordinary hours of work determine the rate at which the entitlement accrues and also the entitlement to payment when leave is taken. 

In this case, during the employee’s full-time employment, the rate of accrual was at the equivalent rate of 152 hours (4 weeks x 38 ordinary hours) per year of continuous service. From the commencement of part-time employment, the employee will be accruing leave at the equivalent rate of 96 hours per year (4 x 24 ordinary hours).

Calculation example 

If this employee had six months' service as a full-time employee and six months service as a part-time employee, the total accrual of annual leave after 12 months' continuous service would be 124 hours (which is based on six months’ accrual at the annual rate of 152 hours (76) and six months’ accrual at the annual rate of 96 hours (48).   

If the then part-time employee takes one week’s paid annual leave, they will be entitled to 24 ordinary hours pay at their base rate of pay, with 24 hours being deducted from the employee’s accrued annual leave balance. 

Your HR sidekick

From contracts of employment to letters of termination and everything in between, My Business Workplace has got you covered.

Found this useful?

Subscribe to our newsletter and receive the best business tips and articles straight to your inbox.

Thank you for signing up to our newsletter. You're one step closer to receiving more insightful information to help better your business.

We take your privacy seriously and by subscribing to our newsletter you agree to the terms of our Privacy Policy available below.