Long Service Leave (Australia)

A paid leave entitlement granted to Australian employees after a lengthy period of continuous service with one employer, typically 7 to 10 years depending on the state or territory, providing extended time off as recognition of long-term loyalty.

What Is Long Service Leave in Australia?

Key Takeaways

  • ✓Long service leave is a paid entitlement unique to Australia (and parts of New Zealand) that rewards continuous employment with one employer over an extended period, usually 10 years.
  • ✓It isn't governed by a single federal law. Each state and territory has its own legislation with different qualifying periods, accrual rates, and portability rules.
  • ✓The standard entitlement is 8.67 weeks (2 months) of paid leave after 10 years, though some awards and enterprise agreements offer more generous terms.
  • ✓Employees who leave after 7 years in most jurisdictions can claim a pro-rata payout for their accrued long service leave balance.
  • ✓Some industries, including construction, cleaning, security, and community services, have portable long service leave schemes where service transfers between employers.

Long service leave is something you won't find in most other countries. It's a distinctly Australian entitlement that dates back to the 1860s, when colonial employers gave workers extended leave so they could travel to Britain and back by ship. The trip itself took months. The concept stuck, and by the mid-20th century every state and territory had passed legislation making it a legal right. Today, it gives employees an extended block of paid time off after years of continuous service. Think of it as the employer's acknowledgment that someone who has stayed for a decade deserves a real break. Most employees use it for travel, study, family time, or simply recharging before the next chapter. For HR teams, long service leave creates a real liability on the balance sheet. You're accruing costs from day one, and the payout obligation grows each year. Getting the calculations right, especially across multiple jurisdictions, is one of the trickier payroll challenges in Australian employment.

8.67Weeks of leave typically accrued after 10 years of continuous service under most state and territory laws
1955Year New South Wales introduced Australia's first long service leave legislation, making it one of the world's earliest
7 yrsMinimum qualifying period in some jurisdictions (ACT, NSW) before a pro-rata entitlement kicks in on termination
100%Of Australian states and territories mandate long service leave, though rules vary by jurisdiction

Long Service Leave by State and Territory

There's no single national standard. Each jurisdiction sets its own rules. This table covers the key differences across Australia's states and territories.

JurisdictionQualifying PeriodLeave EntitlementGoverning LegislationPro-Rata on Termination
New South Wales10 years8.67 weeks (2 months)Long Service Leave Act 1955 (NSW)After 5 years (employer-initiated) or 7 years (any reason)
Victoria10 years (15 for casual)8.67 weeksLong Service Leave Act 2018 (Vic)After 7 years
Queensland10 years8.67 weeksIndustrial Relations Act 2016 (Qld)After 7 years
Western Australia10 years8.67 weeksLong Service Leave Act 1958 (WA)After 7 years (employer-initiated) or 10 years
South Australia10 years13 weeksLong Service Leave Act 1987 (SA)After 7 years
Tasmania10 years8.67 weeksLong Service Leave Act 1976 (Tas)After 7 years
ACT7 years6.07 weeks at 7 yearsLong Service Leave Act 1976 (ACT)After 5 years (employer-initiated) or 7 years
Northern Territory10 years13 weeksLong Service Leave Act 1981 (NT)After 7 years

How Long Service Leave Accrues and Is Calculated

Understanding the math behind long service leave matters for both payroll accuracy and financial provisioning.

Standard accrual formula

In most states, the accrual rate is 8.67 weeks per 10 years, which works out to 0.8667 weeks (roughly 4.33 days) per year of service. The leave is calculated at the employee's ordinary rate of pay at the time of taking it. If someone earned $80,000 when they started accruing but earns $130,000 when they take the leave, they're paid at the $130,000 rate. This matters because the financial liability grows not just with time, but also with every pay rise.

What counts as continuous service

Continuous service includes all periods of paid leave (annual, sick, parental), authorized unpaid leave of up to 6 months (varies by state), and periods of workers' compensation. It doesn't usually include unauthorized absences or unpaid leave beyond the statutory limit. Casual employees in Victoria can now accrue long service leave after the 2018 reforms, counting each engagement period. In other states, casual accrual depends on whether the engagement is regular and systematic.

Part-time and variable hours employees

Part-time employees accrue long service leave at the same rate as full-time workers, but the leave entitlement reflects their part-time hours. If someone worked full-time for 5 years then part-time for 5 years, most jurisdictions calculate the leave based on an average of hours worked across the qualifying period. This "blended" calculation catches many payroll teams off guard when the numbers don't match simple full-time projections.

Portable Long Service Leave Schemes

In industries with high turnover and project-based work, employees rarely stay with one employer for 10 years. Portable schemes solve this by letting workers carry their accrued leave across employers.

How portable schemes work

Employers in covered industries register with a state-run scheme and pay a levy (typically 1.7% to 2.7% of ordinary wages) into a central fund. The fund tracks each worker's total industry service across all registered employers. When the worker hits the qualifying period, they claim leave from the fund, not from their current employer. The worker doesn't lose accrued service when they change jobs within the industry.

Industries covered

Construction and building is the oldest and most widespread portable scheme, operating in every state and territory. Beyond construction, coverage varies. Victoria and the ACT cover contract cleaning. The ACT covers community services and security. Queensland covers contract cleaning and community services. More industries are being added. The trend is clearly toward expanding portability to sectors where short tenures are the norm.

Employer Obligations and Common Pitfalls

Getting long service leave wrong can result in penalties, back-pay orders, and employee claims. Here are the areas that trip up employers most often.

  • Record keeping: Employers must maintain records of each employee's service dates, leave taken, and accrual balance. Records must be kept for 7 years after the employment ends. Failure to keep adequate records shifts the burden of proof to the employer in any dispute.
  • Pay calculations on termination: When an employee leaves after the pro-rata qualifying period, the payout must be included in the final pay. Getting the ordinary pay rate wrong, especially for employees with shift loadings, regular overtime, or allowances, is the most common error.
  • Leave cashing out: Most states don't allow employees to cash out long service leave while still employed. The leave must actually be taken. Some enterprise agreements create exceptions, but these need to comply with the specific state legislation.
  • Transfer of business: If a business is sold or transferred, the new employer generally inherits the long service leave liability. This needs to be factored into any acquisition due diligence.
  • Interacting with other leave: Long service leave can usually be taken alongside other leave types. In some states, public holidays that fall during a long service leave period don't count as long service leave days.

Financial Impact and Provisioning

Long service leave represents a growing liability on the balance sheet. Smart finance teams provision for it from year one.

8.67%
Of an employee's annual salary accrues as long service leave liability each year (standard 10-year rate)Standard calculation
$1.2B+
Estimated total long service leave liability across Australian government employersProductivity Commission, 2023
13 wks
Maximum entitlement in SA and NT, the most generous jurisdictionsState legislation
2.5%
Typical portable scheme levy rate as a percentage of ordinary wagesCoINVEST / state scheme data

HR Best Practices for Managing Long Service Leave

Proactive management of long service leave reduces financial surprises and keeps employees informed about their entitlements.

Tracking and communication

Most modern HRIS platforms can track long service leave accruals automatically, but you'll need to configure them for the correct state legislation. Don't assume a default setting covers your situation. Send employees annual statements showing their accrued balance and projected eligibility date. Transparency reduces disputes and helps employees plan their leave well in advance.

Encouraging employees to take leave

Large accrued balances are a financial risk. Encourage employees approaching their entitlement to plan their leave. Some organizations allow employees to take a half-pay option (double the leave duration at 50% pay), which can be attractive for employees planning extended travel. Others allow leave to be taken in separate blocks rather than one continuous period, depending on the state's rules.

Multi-state compliance

For organizations with employees across multiple states, the governing legislation is generally based on the state where the employee is based, not the employer's head office. An employee in South Australia gets 13 weeks even if the company is headquartered in NSW where the standard is 8.67 weeks. Map your workforce by state and apply the correct rules to each group.

Recent Reforms and Trends

Long service leave legislation has been evolving, with several key changes in recent years.

Victoria's 2018 overhaul

Victoria's Long Service Leave Act 2018 was the most significant reform in decades. It extended coverage to casual employees with regular and systematic engagement, allowed employees to take leave in smaller blocks (as little as one day at a time), and introduced a 12-month parental leave absence that doesn't break continuity. Other states are watching Victoria's approach closely.

Expanding portable schemes

There's growing pressure to make long service leave portable across more industries. The argument is simple: the modern workforce changes jobs far more frequently than workers did in the 1950s when these laws were written. A 10-year qualifying period with one employer excludes a huge portion of the workforce. The Productivity Commission and various state reviews have recommended broader portability, and more sectors are likely to be brought into schemes over the coming years.

Frequently Asked Questions

Can an employer refuse a long service leave request?

It depends on the state. In most jurisdictions, once an employee has met the qualifying period, they have a right to take the leave. However, the employer and employee typically need to agree on the timing. Some state laws allow employers to direct employees to take long service leave, particularly if the accrued balance is large. Check your state's specific legislation, as the rules around refusal and timing vary.

Does long service leave accrue during parental leave?

In most states, paid parental leave counts toward continuous service for long service leave purposes. Unpaid parental leave doesn't break service continuity but generally doesn't count as service time for accrual purposes. Victoria's 2018 reforms specifically addressed this, allowing up to 12 months of parental leave absence without breaking the continuity of service.

What happens to long service leave if an employee is terminated?

If the employee has reached the pro-rata threshold (usually 5 to 7 years, depending on the state and reason for termination), they're entitled to a pro-rata payout of their accrued leave. If they haven't reached the threshold, they generally lose the entitlement, though some enterprise agreements or contracts may provide for earlier payouts. Summary dismissal for serious misconduct may forfeit the entitlement in some jurisdictions.

Can long service leave be taken at half pay?

Several states allow employees to take long service leave at half pay for double the duration, provided both the employer and employee agree. For example, 8.67 weeks at full pay could become 17.34 weeks at half pay. This isn't automatic; it requires agreement and should be documented in writing. Not all state legislation explicitly permits this, so check the relevant act.

Does long service leave apply to contractors and casuals?

Independent contractors aren't covered by long service leave legislation. Casual employees are a different story. Victoria explicitly includes regular casuals after 2018. In other states, casual employees may qualify if their engagement is regular and systematic over the qualifying period, though this is often disputed. Sham contracting arrangements, where a worker is labeled a contractor but functions as an employee, can still give rise to long service leave claims.

How does long service leave interact with notice periods?

An employee can't generally be required to use long service leave during their notice period without mutual agreement. Some jurisdictions explicitly prohibit employers from directing employees to take long service leave during notice. If an employee resigns and has an accrued long service leave balance above the pro-rata threshold, the unused portion must be paid out as a lump sum in the final pay.
Adithyan RKWritten by Adithyan RK
Surya N
Fact-checked by Surya N
Published on: 25 Mar 2026Last updated:
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