Long Service Leave in Australia: The Complete Guide

What is long service leave?🔗

Long service leave is paid leave you earn by staying with the same employer (or the same business) for a long time. It is a loyalty reward baked into Australian employment law, dating back to when workers who had served long enough were given time to travel home to Britain.

How much do you get, and when?🔗

The most common benchmark is about 8.67 weeks (roughly two months) of paid leave after 10 years of continuous service. That is a fair rule of thumb for NSW, QLD, WA and TAS, but it is not universal: VIC and the ACT vest at 7 years on a different basis, and SA and NT provide 13 weeks after 10 years.

Most states also allow a pro-rata payout if your employment ends before the full period, once you have served a minimum (often 7 years). The resignation rules vary a lot, though: NSW is more restrictive before 10 years, while VIC, QLD, WA, SA, TAS and NT broadly allow pro-rata from 7 years. A redundancy usually unlocks access at a lower threshold. Always check your state before assuming a payout on resignation.

What counts as continuous service?🔗

Continuous service is the clock that determines your entitlement, and most normal employment does not reset it. Paid leave (annual, sick, parental), most approved unpaid leave, and a transfer to a related entity or new owner of the same business generally do NOT break it. A genuine break in employment (resigning and being rehired later) usually does, and very long unpaid absences can too.

If you work in building and construction, contract cleaning, community services or security, a portable long service leave scheme may apply, where your years of service in the industry count even as you move between employers. That can make a big difference, so check whether your industry has one in your state.

Take it, cash it out, or get it paid out on termination🔗

• Take it as leave. Agree a date and take the time off at your ordinary rate. Some states let you take it at double pay for half the time (or half pay for double) by agreement.
• Cash it out while employed. Allowed in some states by mutual agreement, not permitted in others. Check your state before assuming you can swap leave for cash.
• Get it paid out on termination. After the qualifying period, unused LSL is generally paid as a lump sum, whether you resign, are made redundant or are dismissed (subject to state conditions).

LSL is generally paid at your ordinary rate at the time you take or receive it, not the rate you were on when you accrued it. If you are close to a 7 or 10-year milestone, that is worth knowing before you make a move.

How long service leave is taxed🔗

Taken as leave while employed, LSL is taxed as ordinary income with normal PAYG withholding, no special rates. Paid out on termination, the tax depends on when the leave accrued, split into three historical periods.

For most employees today, virtually all LSL accrued after 17 August 1993, so the marginal-rate treatment is what applies in practice. A genuine redundancy can make the overall payout more favourable via the redundancy concession. This is general information only, so confirm your situation with the ATO or a registered tax agent.

State by state, in brief🔗

A quick comparison. This is a general guide only, so verify the current rules with your state or territory authority before relying on it.

❓ Frequently asked questions🔗