Leave liabilities: a shared conversation for HR and Finance

Published by SESAY · Updated 3 October 2026

Start with a reconciled balance

Agree the reporting date, workforce population and leave categories. Reconcile opening balances, accruals, leave taken and adjustments to payroll. Check hours, days and weeks are not mixed. A report is only useful when HR and Finance can explain where its figures came from.

Fictional planning example

Assume three employees each have 100 hours of unused annual leave and an applicable rate of $40 an hour. A simple gross base-pay estimate is 3 × 100 × $40 = $12,000. If a flat 17.5% leave loading applies to all three in this example, it adds $2,100, giving $14,100. These assumptions are illustrative; loading and other payment rules must be checked for each employee.

Separate three different questions

An hours balance, a termination payout and a financial-statement provision answer different questions. A planning estimate is not automatically the amount payable on termination or the accounting provision. Finance should determine the accounting approach, applicable on-costs, measurement and disclosure requirements with its advisers.

Use the report for decisions

HR can discuss leave plans, workload and coverage with managers. Finance can model cash timing and budget exposure. Payroll can investigate negative balances, unusual adjustments and rate changes. Report aggregated trends to broader audiences and limit employee-level detail to authorised roles.

How SESAY can help

SESAY can reconcile balances, build a reporting dictionary and produce agreed leave exposure and exception reports. The output can support HR planning and Finance review, with assumptions clearly shown and accounting judgements retained by the appropriate adviser.

Sources and practical tools

• Fair Work — Payment for annual leave
• Long service leave jurisdiction guide

Fictional examples and general process guidance. Confirm applicable employment rules, facts and current official guidance before acting.