Commission and sales driven income workers are entitled to long service leave; that is, 13 weeks after 10 years of continuous service. Pro-rata leave is also available after 7 years of continuous service (if the worker leaves their employment between 7 and 10 years).
Workers on commission, payment by result or other sales driven income
If a worker is paid on commission or part fixed rate (e.g. retainer) / part commission or some other system of payment by result, the weekly rate of pay is calculated by averaging the weekly earnings over the 12 months (52 weeks) immediately preceding the day of taking leave.
To work out your entitlement you will need the following details:
- your employment start date
- your expected long service leave date or termination date
- any periods of leave without pay that you have taken
- any periods of long service leave already taken.
For each worker, the employer must at intervals of 12 months, calculate the average number of hours per week worked by the worker over the preceding period of 12 months. So you should be able to get this information from your employer.
A long service leave payment for sales driven income workers is based upon the average of the last 12 months (52 weeks) of income (include base rate, commission, sales, retainers etc). To calculate the weekly entitlement, add together all income from the immediate 12 month period prior to the leave date, and divided by 52.
total income over 52 weeks ÷ 52
Any full week where a worker has taken unpaid leave or was absent due to injury (and receiving workers' compensation), these weeks are ignored and replaced by a worked week.
Any period when the worker was on paid leave is counted in the averaging period.
Jack works on commission as an insurance agent. Jack is due to take his accrued long service leave entitlement starting next week. Jack's boss, Patricia, adds up all the monies she has paid to Jack over the past 12 months before tax.
Jack also looks back through all his payslips for the previous 12 months. Jack has had a profitable year and finds that he has been paid a gross income before tax of $110,000.
Jack and Patricia's final calculations agree and Patricia provides Jack with a summary of his entitlement for his records. Whilst on long service leave Jack can expect to be paid a gross (before tax) weekly income of $2,115.38 (i.e. $110,000 ÷ 52).
Target based income & bonuses
A worker who receives a bonus for achieving a target, is not a worker whose payment is by result. For example, a worker who gets paid an hourly rate but earns a bonus for making over 100 shoes in a day, is not receiving a payment by result. The worker still gets their normal pay, and has the opportunity to earn a bonus.
Other types of bonus, such as a Christmas bonus of $500, are also not included in any long service leave calculations.
Long service leave is primarily concerned with remuneration for hours worked and payment is based on 'ordinary rate of pay' which excludes penalty rates, overtime and shift premiums. However, the Long Service Leave Act does not specifically mention allowances.
Allowances are generally paid to compensate a worker for expenses or other circumstances incurred for work purposes or in the course of their work, such as a uniform laundry allowance, locality allowance or a car allowance where the worker’s personal vehicle is used for work purposes.
As work-related expenses are not incurred whilst a worker is on leave, it is unlikely that an allowance needs to be paid.
If there is an allowance that you believe should be calculated as part of your 'ordinary rate of pay' please complete our long service leave form to receive a determination by one of our Inspectors.
Questions about your long service leave?
If you have read all of the long service leave information on our website and you still have questions or concerns about your entitlements or you need help to work out the correct entitlement, please complete our long service leave form.