Employee Entitlements Checklist for Buying a Business in Australia (Free)
An employee entitlements checklist for buying a business in Australia helps you verify every staff-related liability before settlement — leave balances, long service leave, superannuation arrears, and casual conversion risk. These obligations don't appear in the headline EBITDA figure, and sellers rarely volunteer them unprompted.
Getting this wrong is expensive. A blue-collar business with ten staff and average tenure of four years could be carrying $60,000–$120,000 in accrued entitlements that the seller has quietly not provisioned. For a business you're paying $500,000 for, that's not a rounding error.
This is covered in Module 5 of the Playbook — the full due diligence process from preliminary review through to confirmatory checks.
Why a dedicated employee checklist matters
The general comprehensive due diligence checklist covers employment at a high level. This checklist goes deeper — specifically for buyers of trades, cleaning, landscaping, and other blue-collar businesses where employment structures are often informal and the paperwork hasn't always kept pace with reality.
I've seen a cleaning business acquisition in Melbourne where the buyer did everything right — financials, legal, customer review — and still ended up with a $90,000 surprise on settlement day because three long-serving supervisors had annual leave balances that had never been drawn down and weren't properly provisioned in the accounts. The money was gone. The leave was real. The seller was technically compliant — he just hadn't made it easy to find.
The asset sale versus share sale structure matters enormously here. In a share sale, every entitlement transfers automatically. In an asset sale, you make new employment offers — but Fair Work Act obligations generally require you to recognise prior service, so the liability follows you regardless of how the deal is structured.
Three things to check before you even look at the payroll system
1. How long has the core team actually been there?
The information memorandum says "experienced team in place." What it doesn't say is that two of them have been there since 2018 and their long service leave is ticking. Ask for start dates for every employee before you dig into anything else.
2. Are the casuals genuinely casual?
Trades businesses often run with a crew of "casuals" who have worked regular shifts for years. Under the Fair Work Act, a regular casual who has worked a consistent pattern for 12 months can request conversion to permanent employment — and with that comes entitlements. If the seller has been ignoring those requests, you inherit the exposure.
3. Is super actually being paid?
A business under cash flow pressure often defers super. The ATO takes a dim view of this (and charges interest and penalties). Verify that super guarantee contributions are current before you settle. See my detailed breakdown in employee entitlements due diligence.
The full checklist below covers every item across six categories: employee register, annual leave, long service leave, superannuation, subcontractor risk, and post-settlement obligations. It includes state-specific notes for Queensland, New South Wales, Victoria, and Western Australia.
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