What this help guide covers:

Enabling Long Service Leave (calculated)
Requirements for Tanda to calculate an LSL balance
Configuring the Long Service Leave tab
- Weeks-based (NSW, VIC, TAS)
- Hours-based (QLD, WA)
Reporting and Configuring LSL Liabilities
FAQs

Enabling Long Service Leave (calculated)

If the Leave Type ‘Long Service Leave (calculated)’ does not already exist in your account, you can enable it by navigating to Payroll > Payroll Settings > Leave Types and clicking ‘New: Try Out Improved Long Service Leave’.

This will create the leave type and allow you to use the Long Service Leave tab on employee profiles.

Important: If you have already turned off the Long Service Leave (calculated) leave type by ticking the ‘Do not add this leave rule to employee payslips’, you will need to untick this if you want to have entitlements and leave taken added to payslips.

Requirements for Tanda to calculate a Long Service Leave balance

For Tanda to calculate an accurate balance, all appropriate information should be entered into the Long Service Leave tab on an employee's profile. If at some point, the employee has taken LSL or worked outside of Tanda, the calculation is likely not correct and will require manual input to amend it.

We require:

For Weeks-based States (NSW, VIC, SA):

Any LSL taken outside of Tanda (we only automatically count leave requests for the leave type ‘LSL (calculated)’.
Has the employee been classified as Full Time for their full tenure, or have they had varied hours?
Any Non-Continuous days of service outside of Tanda
To calculate average weekly pay rates, either: timesheets, an hourly rate and Contracted Weekly Hours, a Salary, or a manually entered average weekly pay rate.

For Hours-based States (QLD, WA):

Total Ordinary Hours worked outside of Tanda timesheets (only necessary if the employee has had varied hours).
Contracted Weekly Hours for their entire employment tenure set in Pay Conditions (only necessary if the employee has not had varied hours).
Takable LSL balance the employee would have received outside of Tanda Payroll (only necessary if the employee has already reached their entitlement).
Any LSL taken outside of Tanda (we only automatically count leave requests for the leave type ‘LSL (calculated)’).
Has the employee been classified as Full Time for their full tenure, or have they had varied hours?
Any Non-Continuous days of service outside of Tanda

Configuring the LSL tab

The Long Service Leave (calculated) feature is essentially a complex calculator. It will only produce an accurate balance if it has all the correct information.

Below is an explanation of each field in the LSL tab and how to configure it to calculate an employee’s balance.

When setting up Long Service Leave (calculated) for the first time on employee profiles, navigate to the Payroll tab > Long Service Leave tab. You'll see the following screen:

First, select the state or territory the employee belongs to. You are not able to adjust this after saving, so ensure that it is correct.

Then, enter any additional days of non-continuous service the employee took outside of the system. This is optional, and can also be entered/edited later.

Finally, select whether the employee has always worked as a full-time employee or if they work varied hours. This determines where the balance and rate calculations should look at timesheets or pay conditions. This field can also be edited later.

Note: The calculations will take into account all current and previous timesheets. It will not look at future timesheets.

Once this has been set up, follow the guide below for your state to set up the rest of the profile:

Weeks-based (NSW, VIC, SA)

Balances:

The prorated and available balances for weeks-based states should automatically be accurate unless there is any missing information regarding any leave taken that hasn't been recorded using the 'Long Service Leave (calculated)' leave type.

If the number of weeks the employee has been assigned looks wrong, check the employee’s Employment Start Date and Leave Taken outside of Tanda Payroll fields.

The prorated balance is determined from a calculation based on the date of the last entitlement proportionate to today's date.

Weekly Rate:

This number is calculated in either of the following ways:

If the employee is Salaried, the Weekly Salary is used (Annual Salary / 52).
If the employee is Full Time, and the Employment Classification field in the LSL tab is set to 'Always Full-Time', the Contracted Weekly Hours will be multiplied by the hourly rate.
If the employee has varied hours, it will average the hours in timesheets and multiply that average by the hourly rate.
The method of finding the average timesheet hours differs slightly from state to state. Generally, it will take the highest average number of hours over different periods of time.
- In Victoria, for example, the calculation compares "the greatest of the average weekly hours ... over either the preceding 52 weeks, 260 weeks, or the entire period of continuous employment.".
Refer to the legislation regarding your specific state to check the calculation.

Important to note: The calculation derived from using the average of timesheets is often an estimate and should be used as a guide.

This is because certain Long Service Leave calculations require timesheet data from the employee's entire employment period.

If the employee taking Long Service Leave has worked time that is not captured in Tanda, it is recommended that a manual calculation is performed using that data to ensure the correct average is used.

If the system does not have enough information to be correct, a manual adjustment can be made by selecting ‘Yes - use higher rate’ and entering a weekly value.

This manually entered rate will remain as is unless it is changed back to ‘No - use current rate’, and the onus will be on you to ensure it is accurate.

Other fields:

Below is a description of what to enter in each field and how this impacts the employee’s LSL.

Leave taken outside of Tanda Payroll

This should include any Long Service Leave already taken by the employee that is not captured within the leave type ‘Long Service Leave (calculated)’. If LSL has been taken in Tanda using a leave type that is not the automated LSL leave type, it also needs to be entered here.

The Available Balance will be reduced by this amount.

Employment classification

If the employee has always worked the same hours, select ‘Yes - always full-time’. The pay calculations will refer to the Pay Conditions (the CWH multiplied by the Hourly rate, or the Weekly Salary).

If the employee has worked varied hours, and therefore has a different number of ordinary hours worked each week, choose No - varied hours. This will then take the average of hours worked from timesheets and multiply it by the hourly rate.

Note: The exception to this when selecting ‘No - varied hours’ is Part Time staff in Victoria and NSW.

For staff in Victoria, if their current pay conditions have not changed in 2 years, they are not classified as having ‘none fixed or changed hours’, and the system will calculate the weekly rate using Contracted Weekly Hours multiplied by the hourly rate, instead of using timesheets.

The same happens for staff in NSW, but the pay conditions must not have changed in 3 years, instead of 2.

Non-continuous service

If the employee has taken a break from work, and it didn’t break the continuity of service, it may be classified as non-continuous service. Refer to the legislation from your specific state to determine what does and doesn’t count.

If the employee has a period of non-continuous service, enter the number of days here, and the entitlement date will be pushed back by that number of days.

Hours-based (QLD, WA)

Balances:

For the majority of hours-based profiles, there will be some degree of manual calculation and data entry required to produce an accurate balance. This is because Tanda does not (and cannot determine) certain variables as they will have been tracked outside of the system.

Follow the below steps to set up employees with LSL properly in Tanda for QLD and WA:

Step 1:

If the employee has been working full-time for their whole employment period, you can tick ‘Yes’ under the ‘Has this employee always worked fulltime?’ field. If they have had varied hours at some point, skip to Step 2.

This will mean that we calculate their overall LSL balance from the Contracted Weekly Hours in their Pay Conditions.

If this field is ticked ‘Yes’, there will be no field to enter any hours worked outside of Tanda, as it is not required.

Step 2:

If the employee has had varied hours at some point in their employment period, you can tick ‘No’ under the ‘Has this employee always worked fulltime?’ field. Even if the employee has always worked as full-time, you can still tick ‘no’ if you want to manually enter their hours worked.

This means we will calculate the overall LSL balance from Ordinary Hours in timesheets in Tanda plus the number entered into the Ordinary Hours worked outside of system field.

Step 3:

Ordinary hours worked outside Tanda

Only if the answer to step 1/2 is ticked 'No':

Enter the number of Ordinary Hours worked outside of Tanda into the below field:

This should capture any hours worked that are not already entered in timesheets. This also includes any time an employee has been classified as Salaried in Tanda if they didn't also have timesheets for that period.

Step 4:

Checking Prorated Balances

The total LSL balance is then calculated using the total number of Ordinary Hours Worked / 52 x 8.6667 / 10 (Business Queensland Government website).

The overall calculated balance will be entered into the prorated balance column. You can check this under the Payroll Details tab under the Long Service Leave Balance section.

Step 5:

Entering Available Balances

Once the overall Prorated Balance has been calculated, you can specify how much of that has already been given to the employee at their last entitlement mark if applicable (e.g. at 10 or 15 years).

If the employee has not reached this entitlement already, leave this field at 0.

This value needs to be calculated externally and entered into the Leave Received outside of Tanda Payroll field.

Note: If you are intending to bring over balances from previous payroll systems, make sure that these balances don’t include any prorated amounts. Some payroll systems let LSL accrue using an accrual rate, rather than assigning a balance at the entitlement mark. You should only include balances that employees can currently take here.

The overall Prorated Balance from Step 4 will be reduced by the value entered here, and the employee will be able to use the Leave Received outside of Tanda Payroll value that is entered as their balance for a leave request.

Example

For example, if I had an employee with 12 years of employment at my company, and I recently switched to Tanda, I would need to calculate how much they would have received at 10 years, as well as how many hours they have worked overall, to calculate the prorated balance. If they had no periods of Unpaid Leave and worked 38 hours/week, I could calculate this by doing the following calculations:

38 (hours/week) x 52 (weeks/year) x 10 (years of employment) = 19760 hours.

Into the QLD LSL formula:

19760 / 52 x 8.6667 / 10 = 329.3346 hours of LSL.

I would enter 329.3346 hours into the 'Leave Received out of Tanda Payroll' field.

If this employee were Full Time (not salaried) and used timesheets, I would therefore also need to enter the Ordinary Hours Worked Outside Tanda to calculate the prorated balance.

I could do this by doing the following calculation:

38 (hours/week) x 52 (weeks/year) x 12 (employment duration) = 23712 hours worked.

I would enter 23712 hours into the 'Ordinary Hours Worked outside Tanda' field.

The result would be 395.2015 overall hours, minus the entered 329.3346 available hours, giving me: 329.3346 Available Balance, 65.8669 Prorated Balance.

As hours are worked in timesheets going forward, this will be automatically added to the calculation, and the Prorated Balance will increase accordingly. When the employee reaches 15 years, they will automatically be assigned their next available balance in their payslip.

Note: We will not automatically assign a Current Balance to the profile for these states based only on the employment tenure. For Queensland and Western Australia, Current/Available balances will only be automatically assigned when the entitlement date is reached within Tanda payroll and the balance is accrued in that payslip.

Other Fields

Leave taken outside of Tanda Payroll

This should include any Long Service Leave already taken by the employee that is not captured within the leave type ‘Long Service Leave (calculated)’. If LSL has been taken in Tanda using a leave type that is not the automated LSL leave type, it also needs to be entered here.

This will reduce the Available Balance.

Employment classification

If the employee has always worked the same hours, select ‘Yes - always full-time’. The balance calculations will refer to the Pay Conditions (the CWH multiplied by the Hourly rate, or the Weekly Salary).

If the employee has worked varied hours, and therefore has a different number of ordinary hours worked each week, choose No - varied hours. This will allow you to enter the number of Ordinary Hours worked outside Tanda.

Non-continuous service

If the employee has a period of non-continuous service, enter the number of days here, and the entitlement date will be pushed back by that number of days.

Pay:

The pay rate will pull from what is currently in the employee’s pay conditions. If there is an hourly rate, it will use that value. If there is a salary, it will determine an hourly rate by calculating a weekly salary and dividing that by the number of Contracted Weekly Hours set.

Reporting and Configuring LSL Liabilities

Long Service Leave (calculated) will not journal like regular leave types. This is due to variations in average hours and pay impacting the overall liability of LSL, meaning a once-off per-pay run liability calculation will often become inaccurate after some time.

Instead, you can track LSL liabilities using the Long Service Leave Liability Report for your state. This will allow you to see the Current, Total, Future, Discounted and Provisioned Liabilities for each employee, regardless of their employment tenure, for any Pay Run. For staff to appear in the report, their Long Service Leave tab in their profile must first be configured.

You can configure the LSL provisioning by setting specific probability, discount and wage increase percentages. Find this under Payroll > Payroll Settings > Long Service Leave.

From here, you can set associated percentages and rates for each year of tenure to determine liability calculations for LSL.

These settings are optional. You can enter values in all, none or some fields without issue.

Note: This configuration will not impact the actual balances or pay rates of LSL. It will only impact the values in the Long Service Leave Liability Reports.

Below is an explanation for each field in the Long Service Leave Liabilities reports.

Current Liability:

The Available LSL balance multiplied by the pay rate.

For example, if the Available balance is 200 hours, and the pay rate is $20, the Current Liability would be $4000.

Total Liability

The Available and prorated LSL balance multiplied by the pay rate.

For example, if the Available balance is 200 hours and the Prorated balance is 100 hours, and the pay rate is $20, the Total Liability would be $6000.

Future Liability

If the Annual Wage Increase % is set, the value is the ‘Total Liability’ increased by this percentage for each year until they reach their next LSL entitlement.

For example (for a 12 year QLD employee), if the Total Liability is $6000, and the Annual Wage Increase % is set to 5%, the Future Liability would be $6945.75 (compounding annually at 5% for 3 years, which is how many years until their next entitlement).

Discounted Liability

If the Discount Rates percentages are set, this value is the ‘Future Liability’ reduced by this percentage for each year until they reach their next LSL entitlement. Discount rates are used to determine the worth of the current liability amount at their next entitlement date.

For example (for a 12 year QLD employee), if the Future Liability column is $6945.75, and the discount rate for 10+ years is set to 6%, the Discounted Liability would be $5769.03 (depreciating annually at 6% for 3 years, which is how many years until their next entitlement).

Provisioned Liability

If the Probability Rates are set, this value is proportionate to the value in the Discounted Liability column based on the configured percentage.

For example, if the Discounted Liability column is set to $1000, and the Probability Rate for that tenure is 10%, the Provisioned Liability would be $100.

FAQs

How do I fix my employee’s balance?

Ensure that you enter all information into all the necessary fields. This is primarily: Ordinary Hours worked outside Tanda, Leave Received outside of Tanda Payroll, Leave taken outside of Tanda Payroll.

I think I entered all the values in their profile, and their balances/pay look wrong. What can I check?

Weeks-based states:

The average weekly rate excludes ordinary hours. If the amount you’re expecting is higher than what Tanda is calculating, check that your calculations don’t include any hours classified as non-ordinary. Leave types and award rules can be checked to see if they are classified as Ordinary.
The average weekly rate requires Contracted Weekly Hours if they’re classified as Full Time or Salaried.
The balance in weeks given to the employee is based on the ‘Last Entitlement’ field (which initially is decided using the Employment Start Date). For example, if this is set to ‘10 years of service’ in NSW, the Current Balance will pull 8.6667 weeks. If the balance is lower than you’d expect, check the ‘Leave Taken’ field, as well as any LSL (calculated) leave in the employee’s leave request. Leave taken will reduce the Current Balance.

Hours-based states:

If they’ve been classified as Full Time or Salaried at any point, ensure that there are Contracted Weekly Hours set in every set of Pay Conditions where they are classified as such.
Check that you've entered a value into 'Leave Received outside of Tanda Payroll' field if the employee is already entitled to LSL. If the employee hasn't received their entitlement in a payslip in Tanda, you'll need to add the amount here.

Why does my employee have an available balance when the leave received field is 0 (QLD/WA)?

If the employee has a balance in the Current/Available balance field when they shouldn't, or has a higher Available balance than they should, this is likely due to previous accruals of this leave type already having been accrued on the employee's payslips.

In the previous version of Long Service Leave (calculated), payslips still sometimes accrued LSL in each pay run. These accruals remain in the balance that has been carried over.

If you want to clear this extra accrual out, you can either add a negative accrual line for this amount to a new payslip, or if the Leave Received outside of Tanda Payroll field has been filled, you can reduce this value by that amount.

Why is there already a balance in the 'Leave Received outside of Tanda Payroll' field (QLD/WA)?

If the employee's profile already had an Opening Balance set for LSL (calculated), this value has been moved into the Leave Received outside of Tanda Payroll field and can be edited there.

Why is the LSL entitlement not adding to the payslip (QLD/WA)?

Check the following for why the accrual might not be adding to a payslip when it should:

Check that in the leave type itself, the 'Don't add this leave rule to employee payslips' setting has been unticked:
This may have been turned on previously to prevent any unwanted accruals of this leave type.
Additionally, check if the employee has any approved unpaid leave requests. Periods of Unpaid Leave are counted as non-continuous service and push back the entitlement date of LSL entitlements.
For example, if an employee has taken a month of Unpaid Leave, their Employment anniversary will be pushed back one month.