Are you paying your staff correctly for sick leave?

With winter illness at an all-time high, a lot of employees are having to take time off work to rest and recover.  We have been fielding lots of questions around sick leave, covid subsidies and getting it right when paying staff.  Using the right calculation for payment of sick leave is crucial to ensure the employees get paid correctly and it’s a logistical jigsaw when managing those in conjunction with government leave subsidies.

The information below covers the core questions we get asked and key things you need to know to make sure you managing sick leave legally.

What are they entitled to?

Employees are entitled to a minimum to 10 days sick leave after six months employment, and another 10 days every 12 months after that (if they meet the work test).

Employees can request to use their sick leave entitlement if they are sick or injured, or they are caring for their spouse or a sick or injured person who is a dependant of the employee.

If an employee goes home sick from work, this is counted as a whole day of sick leave taken.

How much do they get paid?

Payment for sick leave is calculated on relevant daily pay, what would the employee have been paid if they had worked that day.  It includes overtime, and productivity or incentive payments like commissions, if they would have received those had they worked on that day.

If it is not possible or practical to determine an employee’s relevant daily pay, the average daily pay calculation may be used for the purposes of calculating the payment due for sick leave.


Getting sick leave right and managing sick leave balances is a big topic for payroll.   There is nothing worse than an employee who is off sick feeling like they are getting paid incorrectly.

Other common questions we receive are questions around covid subsidies and what do I have to pay my staff?  Part days – is this considered a day for sick leave? And is sick leave paid out at termination?

All of these topics and more are covered in depth in our upcoming Small Business Training Hub payroll training courses starting second week of August.     If you would like to find out more or register for one of these upcoming trainings, all the information is here

If you have any questions,

How can we help?

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