Sick leave is a core entitlement in Australia. It helps your team recover from illness, care for family and return to work safely - while giving your business a fair and consistent framework to manage absences.
If you manage people, you’ll often face the same questions: does sick leave roll over to the next year, how does it accrue, what evidence can you ask for, and what happens to unused sick leave when someone leaves?
This guide answers those questions in plain English, highlights your legal obligations under the National Employment Standards (NES) in the Fair Work Act 2009, and shares practical tips so you can manage sick leave confidently and compliantly.
What Is Sick Leave In Australia?
Sick leave (also called personal/carer’s leave) is paid time off work for an employee to recover from their own illness or injury, or to care for an immediate family or household member who is sick or injured.
It’s part of the National Employment Standards and applies to most full-time and part-time employees in Australia. While on sick leave, eligible employees are paid their base rate for their ordinary hours (no overtime or bonuses unless an award or contract says otherwise). For a practical overview, see taking sick leave in Australia and common rights and obligations covered by the NES.
Casual employees don’t receive paid sick leave, but they can usually access certain unpaid entitlements such as 2 days of unpaid carer’s leave per occasion. Evidence requirements can still apply - for example, your policy may set out when a medical certificate is needed, including for casual staff, consistent with any applicable award and the Fair Work Act.
How Does Sick Leave Accrue - And Does It Roll Over?
Personal/carer’s leave is not granted “upfront”. It accrues progressively during the year based on ordinary hours worked.
- Full-time employees (38-hour week): Accrue 10 days per year, which equals 76 hours. That’s approximately 1/26th of ordinary hours. In practical terms, this is about 2.923 hours per fortnight, or roughly 1.462 hours per week.
- Part-time employees: Accrue on a pro-rata basis according to ordinary hours.
- Casual employees: No paid sick leave entitlement, but may take certain unpaid leave in caring situations.
Accrual continues during paid leave (for example, annual leave) and typically pauses during periods of unpaid leave (including unpaid parental leave).
Yes - unused sick leave rolls over year-to-year. There is no cap and no yearly reset under the NES. Any balance at year-end stays in the employee’s leave bank and continues accumulating while employment is continuous. This rollover provides a safety net for employees who may need extended time away due to serious illness or caring responsibilities.
Because rollover is ongoing, accurate record-keeping over time is essential. Keep clear records of accrual and usage for each employee for at least seven years to meet your legal obligations and to resolve any future queries or audits. If you’re unsure how to apply accrual rules to complex rosters, get your payroll system and internal processes aligned with your workplace policies so calculations are consistent.
How Many Sick Days Do Employees Get Each Year?
The NES entitlement for a full-time employee is 10 days (76 hours) of paid personal/carer’s leave per year of continuous service. For part-time staff, it’s pro‑rata based on ordinary hours.
- Full-time: 10 paid days per year (accrues progressively and rolls over).
- Part-time: Pro-rata entitlement that accrues and rolls over.
- Casual: No paid entitlement; limited unpaid entitlements may apply.
Some modern awards or registered agreements may provide more generous entitlements. Always check any applicable award or agreement for your industry before setting internal rules or communicating entitlements to staff.
Employees should notify you as soon as practicable if they are unwell and unable to work and may need to provide reasonable evidence if you require it. Your policy can explain when evidence is required (for example, on the first day of absence, or after a specified number of days). If evidence is needed, it’s acceptable to ask for a medical certificate or statutory declaration in line with your policies and any award. If you’re navigating tricky situations (such as recurring short absences), it can help to reaffirm the rules in your Employment Contract and staff handbook.
Employer Obligations: Accrual, Evidence And Cashing Out
As an employer, you must ensure sick leave accrues correctly and that employees can access it when they are genuinely unwell or caring for a family member. Key obligations include:
- Accurate accrual: Track in hours (or days where appropriate) according to the NES and any applicable award or agreement.
- Access to leave: Allow employees to use accrued personal/carer’s leave when they’re unfit for work or caring for an eligible person.
- Rollover: Unused balances roll over indefinitely during continuous employment - there’s no reset at year-end.
- Evidence: You can require reasonable evidence, consistent with your policies and any award. For single-day absences, your policy can clarify expectations, including when a medical certificate is needed. For guidance on proof expectations, many employers find it helpful to spell out how they handle sick days without a certificate.
- No adverse action: Do not dismiss or disadvantage someone for taking legitimate sick leave.
Can Employees Cash Out Sick Leave?
Generally, no. Cashing out paid personal/carer’s leave is prohibited unless an applicable modern award or registered agreement expressly allows it and all strict conditions are met (for example, written agreement, limits on amounts, and minimum balance requirements). The NES does not otherwise allow cashing out personal/carer’s leave.
If you think cashing out might apply in your workplace, check the exact wording of any award or registered agreement and ensure the conditions are satisfied before proceeding. If in doubt, seek advice before acting - getting it wrong can result in compliance issues.
Managing Sick Leave In Practice: Policies, Records And Pay
Good processes make sick leave simpler for everyone. Here are practical tips to help you stay compliant and fair:
- Use clear, consistent documents: Make sure entitlements and evidence expectations appear in your Employment Contract and your workplace policy or staff handbook. Consistency avoids disputes.
- Keep reliable records: Maintain accurate accrual and usage data for at least seven years. This is essential for compliance and makes payroll queries easier to resolve.
- Pay the correct rate: Sick leave is paid at the employee’s base rate for ordinary hours. Overtime, bonuses or commissions aren’t included unless an award or contract says otherwise.
- Set fair notification rules: Require employees to notify you as soon as practicable when they’re unwell. Include who they should contact and how (call, email, or HR system).
- Be clear on recurring issues: Where absences are frequent, your policy can outline when you’ll request medical clearance to return to work or additional evidence - always within the bounds of reasonableness and privacy.
What’s The Correct Accrual Rate Per Week?
For a full-time employee on a 38-hour week, the annual entitlement is 76 hours. That equates to approximately 1.462 hours per week (or about 2.923 hours per fortnight). This is the figure many payroll systems use to calculate progressive accrual.
Complex Scenarios To Watch
- Unpaid leave or unpaid parental leave: Sick leave generally doesn’t accrue during unpaid periods. It resumes when the employee returns to paid work.
- Casual staff: No paid entitlement, but your policy should still address evidence for unpaid carer’s leave to ensure consistency. If you’re formalising expectations, see how other employers manage medical certificates for casual employees.
- Running out of entitlements: If an employee’s paid balance is exhausted, have a plan for managing further absences (for example, unpaid leave or other options permitted by an award or agreement). Many employers adopt a supportive, documented approach when entitlements run out.
What Happens To Unused Sick Leave On Termination?
Unused paid personal/carer’s leave is not paid out when employment ends, unless an applicable award or registered agreement specifically requires it (which is unusual). This is different from annual leave, which must be paid out.
When employment ends, accrual stops and any unused balance lapses (subject to any award or agreement terms). If you’re planning a final pay, make sure you separate what is and isn’t payable, and consider any notice period or other entitlements that may interact with sick leave. If you’re fielding questions from exiting employees, you can refer them to general information about what happens to unused sick leave.
Quick FAQs
Does sick leave reset each year? No. It rolls over indefinitely during continuous employment.
Can I force employees to use sick leave by year-end? No. You can’t require use by a certain date - the balance must roll over.
Do I have to pay out unused sick leave when someone resigns? Generally no, unless an applicable award or agreement says otherwise.
Where can I clarify day-to-day rules? Keep the basics in contracts and policies, and reinforce expectations during onboarding. If needed, revisit entitlements and workplace rules during team training or policy refreshers. For a broader refresher, many HR teams find it useful to revisit how sick days accrue and everyday NES requirements annually.
Key Takeaways
- Paid personal/carer’s leave accrues progressively and rolls over year-to-year without a cap while employment continues.
- Full-time employees accrue 10 paid days (76 hours) per year; part-time employees accrue pro-rata based on ordinary hours; casuals don’t receive paid sick leave.
- The correct full-time accrual rate is about 1.462 hours per week (or ~2.923 hours per fortnight) for a 38‑hour week.
- Cashing out paid personal/carer’s leave is generally prohibited unless permitted by a specific award or registered agreement and strict conditions are met.
- Unused sick leave is not paid out on termination (unlike annual leave), unless an award or agreement requires it.
- Spell out entitlements and evidence rules in your Employment Contract and workplace policy, maintain accurate records, and apply requirements consistently.
If you’d like a consultation about managing sick leave, updating employment contracts or setting clear workplace policies for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
