Sick Pay Entitlements For Employers In Australia

Managing sick leave well protects your team and your business. When an employee is unwell, you want a clear, compliant process so they can recover while you keep operations moving.

In Australia, paid sick leave is part of the National Employment Standards (NES), but the rules around who gets it, how it accrues, what evidence you can ask for, and how to handle tricky situations aren’t always obvious.

In this guide, we’ll walk through sick pay entitlements in plain English, explain your legal obligations as an employer, and share practical steps to put strong processes in place.

What Counts As Sick Pay In Australia?

Under the NES, “sick leave” sits within personal/carer’s leave. It covers absences when an employee is unfit for work due to illness or injury. It also covers caring responsibilities for an immediate family or household member who is ill or injured, or affected by an unexpected emergency (that aspect is carer’s leave).

Key points to keep in mind:

• Paid personal/carer’s leave is only for permanent employees (full-time and part-time). Casual employees don’t receive paid sick leave under the NES, but may be entitled to unpaid carer’s leave when eligible.
• Leave should be taken when the employee is unfit for work - it’s not meant to be pre-booked like annual leave (unless used as carer’s leave in a known situation).
• Accruals are based on ordinary hours of work and build up progressively during the year (more on accrual rules below).

Importantly, sick leave is a workplace right. You can (and should) require reasonable evidence when appropriate, but you can’t take adverse action against an employee for using their entitlements in good faith.

Who Is Entitled To Paid Sick Leave (And How Much)?

Full-time employees are entitled to 10 days of paid personal/carer’s leave per year under the NES, which accrues progressively. Part-time employees accrue on a pro-rata basis according to their ordinary hours.

• Full-time: 10 days per year, accruing progressively based on hours worked.
• Part-time: Pro-rata of the 10 days, based on ordinary hours.
• Casual: No paid entitlement under the NES, however casuals may access two days of unpaid carer’s leave per occasion (subject to eligibility) and other applicable workplace rights.

Accrued balances roll over from year to year if they aren’t used. For clarity on accrual mechanics and common questions, it’s worth reviewing how sick days accrue in Australia.

Sick leave is paid at the employee’s base rate for ordinary hours they would have worked. You don’t include overtime, penalties, allowances or loadings in the rate for paid personal/carer’s leave.

Note that modern awards, enterprise agreements or employment contracts can provide more generous terms. Ensure your documents line up with the NES as a minimum, and only go above (never below) those standards.

Evidence And Return-To-Work Requirements

You can ask an employee to provide “reasonable evidence” that they’re unfit for work or caring for someone who is ill or injured. In practice, this often means a medical certificate or statutory declaration.

• Medical certificates: You can generally require a certificate to confirm an employee was unfit for work - review your policy and the context before insisting on it. For deeper guidance on “when” and “what” you can request, see medical certificates.
• Statutory declarations: In some cases (for example, where a doctor wasn’t accessible), a stat dec can be acceptable evidence. If you’re using this option, make sure your team knows how to prepare a compliant statutory declaration for sick leave.

Can you ask for a specific diagnosis? Generally, you should avoid seeking sensitive health details beyond what’s reasonably necessary to assess fitness for work and any adjustments required. Focus on capacity, restrictions, and expected return date, rather than detailed medical history.

Return-to-work clearances: If there are safety or operational concerns, it’s reasonable to request a medical clearance before an employee returns to work, particularly for safety-critical roles or after longer absences. Your policy should set out when a clearance is required, how it’s handled, and who sees the information.

Paying And Tracking Sick Leave Accruals

Getting the payroll details right matters - both for compliance and employee trust. Here’s what to cover.

How Sick Leave Accrues

• Accrual is based on ordinary hours worked and accumulates progressively during the year.
• Balances carry over year to year and are not capped by the NES (but check any applicable award or agreement).
• Sick leave does not reset annually like a fresh allocation; it continues to build (and be drawn down) over time.

Good systems help. Use payroll software to automate accruals, capture evidence, and record approvals. Train managers to approve requests consistently and escalate anything unusual to HR or payroll.

Pay Rates And Payslips

• Pay at the employee’s base rate for ordinary hours they would have worked during the absence.
• Show leave taken and balances on payslips where required by law or under an award or agreement.
• Keep clear records: dates, hours, type of leave (sick vs carer’s), and any evidence provided.

Many employers include the approach to sick leave and evidence in an Employment Contract, and support it with a clear Workplace Policy so expectations are transparent for everyone.

Handling Complex Situations: Casuals, No Balance, Probation And Notice

While most sick leave requests are straightforward, the edge cases can be the most challenging. Here’s how to approach them.

When Employees Run Out Of Paid Sick Leave

If a permanent employee has used up their paid balance but is still unfit for work, consider unpaid personal leave, annual leave (if the employee requests it), or reasonable adjustments such as temporary light duties. Document your process and decisions carefully.

It’s sensible to have a plan for managing sick leave when entitlements run out, including when you’ll request updates, explore adjustments, or consider other options (like unpaid leave or, in complex cases, medical capacity assessments).

Casual Employees

Casuals don’t receive paid sick leave under the NES, but they have certain unpaid leave rights (such as unpaid carer’s leave when eligible) and general protections. Your policy should be clear about casual entitlements, evidence, and how shifts are managed when a casual is unwell.

Sick Leave During Probation

Employees are entitled to personal/carer’s leave once they start (accruing from day one) - probation doesn’t remove NES rights. Probation simply provides a period to assess suitability. Manage performance fairly and avoid adverse action because an employee accessed sick leave they were entitled to.

During A Notice Period

Employees can usually take sick leave during a notice period if they’re genuinely unfit for work, subject to the usual evidence rules. This can affect the end date or payments depending on the circumstances. For a deeper dive on scenarios and risks, see sick leave during a notice period.

Long Or Recurrent Absences

Where absences are extended or frequent, focus on capacity for work, safety, and reasonable adjustments. Handle this sensitively and consistently. In some cases, you may need specialist advice around fitness-for-work assessments, potential adjustments, and any risks of discrimination.

If - after careful, lawful process - ongoing employment is no longer tenable because the employee can’t perform the inherent requirements of the role, make sure you follow a fair, evidence-based process and get advice early. Complex decisions like this sit within broader obligations (including anti-discrimination laws), which is why employers often seek guidance before considering action tied to health or capacity.

Contracts, Policies And Practical Steps

Clear documentation is your best friend. It ensures consistency, helps avoid disputes, and keeps you compliant.

• Employment Contract: Set out leave entitlements, notice requirements for absences, how to request leave, and when evidence may be required. A well-drafted Employment Contract should align with the NES and any award or agreement.
• Sick Leave Policy: Explain the process to report absences, when medical certificates or stat decs are required, and expectations around communication, updates and return-to-work clearances. A tailored Workplace Policy helps managers apply rules fairly.
• Evidence Framework: Define what counts as reasonable evidence, including medical certificates and, where appropriate, statutory declarations, and note privacy safeguards.
• Manager Training: Train leaders on approval workflows, privacy, discrimination risks, and how to have supportive return-to-work conversations.
• Payroll & Records: Keep accurate accruals and leave records, and ensure payslips reflect leave taken and balances as required.

Finally, consider how your sick leave approach sits within your broader wellbeing strategy - encouraging early reporting, offering EAP or support, and making reasonable adjustments where practical can all reduce long-term absences and improve culture.

Key Takeaways

• Under the NES, full-time employees receive 10 days of paid personal/carer’s leave per year (part-time pro-rata), accruing progressively and rolling over year to year - review how sick days accrue for clarity.
• Casual employees don’t get paid sick leave under the NES but may have unpaid carer’s leave entitlements and other workplace rights.
• You can ask for reasonable evidence (often a medical certificate or stat dec) - set this out clearly and use a privacy-conscious process; see what you can request regarding medical certificates.
• Pay sick leave at the base rate for ordinary hours and keep robust records through your payroll system.
• Have a plan for complex cases, including when an employee runs out of paid leave, how to navigate sick leave during notice periods, and longer capacity issues, with early advice where needed.
• Document your approach in an Employment Contract and a practical Workplace Policy, and train managers to apply them consistently.
• If balances are exhausted, consider options like unpaid leave or adjustments and review steps for managing sick leave when entitlements run out before taking any further action.

If you’d like a consultation on managing sick pay entitlements for your workplace, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.