If you have employees living in New South Wales and Queensland, you may need to set up more than one Long Service Leave Pay Item. This is due to the ability of the employee to access Long Service Leave entitlements at different stages of their employment.

• Long Service Leave
  This should be your main Long Service Leave accruals. The hours tracked on this pay item should be as accurate as possible, you could also choose to show the accruals on your employee's payslip.
• LSL - Pro Rata (<10 yrs) Transition Payout
  You should use this Pay Item when an employee working for less than 10 years, is entitled to receive a pro-rata payment of Long Service Leave based on the reason why their employment ended.
• LSL - 5 Years Accruals
  You should use this Pay Item to accrue Long Service Leave after the employee has completed their first 10 years of Service. During this 5 year period in NSW and QLD, employees are not entitled to take Long Service Leave until they have worked the full 5 years, but they are entitled to the payout of any of the leave accrued if they terminate their employment.  

Setting Up Long Service Leave

The way you set up the different options of Long Service Leave is similar:

1. In Xero click on the Organisation Menu, go to Settings > Payroll Settings
2. Click on the [Pay Items] > [Leave] Tab
3. Click on [Add] > Paid Leave
   
   è  The Paid Leave screen opens
   
   
   
4. Select/Enter the following details:
   • Leave Name > Type: Long Service Leave
   • Type of Units > Type: Hours
   • Leave Loading Rate > Leave blank
   • Normal Entitlement > See table below
   • Show Balance on Paylip > See table below 
5. Click on [Add]

Long Service Leave Pay Item Set Up Table Summary