A Guide to Long Service Leave for Australian Businesses

Long service leave is one of the most important entitlements for Australian employees, but it’s also one of the most misunderstood. This guide breaks down the basics for business owners, HR managers, and payroll teams, covering eligibility, accrual, entitlements, and recent updates (including NSW’s new portable scheme for community sector workers).

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Long service leave (LSL) is paid leave granted to employees after a long period of continuous service with the same employer. It recognises employee loyalty and offers a substantial break after years of work.

The entitlement is protected under state and territory legislation, and in some cases, under portable long service leave schemes for industries like construction, cleaning, and community services.

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Eligibility varies slightly by state or territory, but most employees qualify after 10 years of continuous service. Some key details:

• Victoria and ACT: Employees are entitled after 7 years.
• NSW, QLD, WA, TAS, NT: Standard entitlement begins at 10 years.
• SA: 13 weeks after 10 years.

Continuous Service Considerations:

• Includes full-time, part-time, and (in some cases) casual employees.
• Approved leave (e.g. sick, annual, paid parental leave) does not break continuity.
• Unpaid parental leave generally doesn’t accrue LSL but does not break service.
• Transfers between related entities (like subsidiaries) may count as continuous service.

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LSL is generally calculated based on:

• Years of continuous service
• Ordinary rate of pay at the time leave is taken
• Average weekly hours over a defined period

For part-time or casual employees, the leave is paid pro-rata based on hours worked. For accurate calculations, consult an HR or payroll expert, especially when dealing with variable hours or breaks in service.

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The standard long service leave entitlement in most states and territories is 8.67 weeks of paid leave after ten years of continuous service.

Here’s a table summarising the entitlement periods across different states and territories:

*In Victoria and the ACT, the entitlement applies after 7 years, not 10.

• The entitlement is based on continuous service with the same employer.
• Part-time employees accrue leave on a pro-rata basis.
• Some awards or agreements may offer additional entitlements.
• Casuals may be eligible depending on state or territory rules.

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Some industries operate under portable long service leave schemes, allowing employees to accrue entitlements while working across multiple employers.

Common industries with portable schemes:

• Construction

• Cleaning

• Community services (NSW only, from 1 July 2025)

NSW Community Services Update:

As of 1 July 2025, a Portable Long Service Leave Scheme is in effect for workers in the community services sector under the SCHADS Award.

Employers in this sector now:

• Contribute levies to a central fund

• Are not directly responsible for funding or tracking portable LSL

• Must register employees and report service as required

Want to know if you’re affected? Visit the NSW Long Service Corporation or read our Long Service Leave FAQs.

Here’s how to stay compliant and avoid disputes:

1. Keep Accurate Records

Track service dates, hours worked, leave taken, and any breaks in service. This is critical for audits and accurate accrual.

2. Have Clear Policies

Establish written policies for requesting, approving, and managing long service leave. Ensure they align with relevant laws and are shared with all employees.

3. Plan for Leave Coverage

Cross-train employees, hire temps, or redistribute tasks to cover extended absences.

4. Encourage Timely Use

Don’t let leave accruals build up excessively. Encourage staff to plan ahead and take their entitlements.

5. Handle Terminations Correctly

Employees may be entitled to long service leave payouts on resignation, redundancy, or retirement, especially after 5+ years in NSW or Victoria.

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• Long service leave is a statutory entitlement for eligible employees.
• Rules and entitlements vary across states and industries.
• NSW’s community sector now falls under a portable scheme (as of 1 July 2025).
• Employers should maintain records, follow state legislation, and update leave policies regularly.

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Pay Cat simplifies long service leave compliance with award-based automation, accurate leave tracking, and full SCHADS Award integration. Whether you're dealing with standard entitlements or the NSW portable scheme, we can help.

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