Long service leave | NSW Government

Long service leave | NSW Government
Long service leave
Long service leave is a period of paid leave a worker can take after completing 10 years of continuous service with an employer. Learn about worker entitlements in these Long Service Leave pages and FAQs provided by NSW Industrial Relations.
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Long Service Leave - Updated Guidance 2026
Long Service Leave - Updated Guidance 2026
The Long Service Leave Act 1955 is a complex legislation. As the regulator NSW Industrial Relations have provided a high level of information. We are stepping it up by now providing an updated Long Service Leave Guide. Launching 1 March 2026, this guide will provide a comprehensive overview of the Act and will help employers by providing a practical guide on using the legislation.
This information is provided by
NSW Industrial Relations
, a NSW Government agency that helps people comply with and understand workplace laws.
Frequently Asked Questions (FAQs)
The
Long Service Leave Act 1955
(LSL Act) entitles
full-time, part-time and casual
workers in NSW to
2 months paid
long service leave on completion of
10 years
continuous service and one month of paid leave for each additional 5 years' service.
The LSL Act defines a month as 4 1/3 weeks (4.3333 recurring). The entitlement is measured in weeks not days or hours.
Also see our page on
Keeping employment records
Long Service Leave Entitlements
1. Who is a worker?
Only “workers” are entitled to long service leave under the LSL Act. A worker includes, but is not limited to:
Full-time workers
Part-time workers (including part-time workers with fluctuating hours)
Casual workers
Pieceworkers
Commission workers (including salary plus commission or commission only)
Outworkers.
2. Who is covered by the LSL Act?
While most NSW workers will be entitled to long service leave, not everyone who works in NSW is covered by the LSL Act. Whether you are covered depends on where you work and what kind of employment agreement you have.
Private sector, public sector and local government workers in NSW who are not covered by an award, enterprise agreement, industrial instrument or workplace law derived long service leave entitlement will be covered by the LSL Act.
NSW Industrial Relations is the regulator for long service leave only in relation to workers covered by the
Long Service Leave Act 1955
.
3. Who is not covered by the LSL Act?
Some NSW workers will receive their long service leave entitlement from a source other than the LSL Act.
The LSL Act does not cover the following NSW workers:
Private sector (national system) workers
who are entitled to long service leave under an award, agreement or pre-modernised award.
You can find your Award or Agreement by searching the Fair Work Commission’s
Agreement Database
or check with the Fair Work Ombudsman on 13 13 94 or visit its website at
www.fairwork.gov.au
NSW public sector workers
who are entitled to long service leave under the
Government Sector Employment Regulation 2014
(NSW) or
NSW government sector workers
who are entitled to long service leave under an individual industrial instrument.
Contact your HR department for information about your long service leave entitlement.
Commonwealth government workers
Contact your HR department for information about your long service leave entitlement.
Local government workers
covered by the Local Government State Award 2023.
Contact us
for information about the Local Government State Award.
4. How do Federal awards and enterprise agreements impact long service leave?
For some workers, long service leave is covered by a federal enterprise agreement or an older federal award instead of the LSL Act.
This may be the case if:
Your workplace has a federally registered enterprise agreement that includes its own long service leave provisions, or
Your employer was covered by an older federal award (made before the
Fair Work Act 2009
) that includes long service leave entitlements. These are sometimes referred to as
pre-reform federal awards
and only apply in limited circumstances.
If your employer advises that you are covered by a federal award or enterprise agreement, you should contact the Fair Work Ombudsman on
13 13 94
or visit their website
www.fairwork.gov.au
to confirm the long service leave provisions that apply to you.
5.What are the special arrangements for workers in building & construction, contract cleaning & the community services industry?
Workers in the building and construction industry, the contract cleaning industry or the community services industry may be eligible for portable long service leave.
Portable long service leave schemes allow workers who remain in the same industry for many years, but who frequently change employers, to accumulate recognised service across multiple employers.
The LSL Act may still apply in certain circumstances. Where a worker has an entitlement under the LSL Act (for example, after 10 years of continuous service with the same employer), the employer may be required to pay long service leave directly and comply with any relevant reporting obligations to the Long Service Corporation.
For more information contact the Long Service Corporation on 13 14 41 or visit their website
www.longservice.nsw.gov.au
.
6. What are the arrangements for workers in the Black Coal Mining Industry?
Long service leave in the black coal mining industry is administered under a national portable long service leave scheme by Coal LSL, an Australian Government agency.
Workers in the black coal mining industry accrue long service leave under Commonwealth legislation rather than under the LSL Act.
These workers should contact Coal LSL on 1300 852 625 or visit their website https://coallsl.com.au/.
7. When is a worker entitled to long service leave?
Unlike other types of leave, a worker’s entitlement to long service leave under the LSL Act only becomes available after certain periods of continuous service with the one employer. If the worker’s employment ends, the entitlement may be paid out in full or on a pro-rata basis, depending on how long they have worked. Once a worker has met the required length of continuous service, they become entitled to long service leave, as shown in the tables below.
Milestone accrual
Long service leave that is taken during employment
Duration of continuous service
Entitlement
10 years
8.67 weeks (2 months) of paid long service leave
Each additional 5 years (i.e. 15 years, 20 years, 25 years etc.)
Additional 4.33 weeks (one month) of paid long service leave
E.g. 20 years’ continuous service = 17.33 weeks (4 months) paid long service leave
Pro-rata long service leave
In some circumstances, a worker may be entitled to a pro-rata long service leave payment when their employment ends
Duration of continuous service
Entitlement
Less than 5 years
No entitlement
Between 5 to 10 years
Entitled to pro-rata long service leave if certain conditions are met:
Worker is terminated by the employer for any reason other than serious and wilful misconduct
Worker terminates their employment on account of illness, incapacity, domestic or other pressing necessity
Worker dies
10+ years
Entitled to pro-rata long service leave if employment ends for any reason
Please refer to FAQs 9 and 10 for further information about pro-rata long service leave.
8. What is continuous service?
To be entitled to long service leave under the LSL Act, a worker must have continuous service with the same employer.
Continuous service means service that is not broken or interrupted for the duration of the worker’s employment. The LSL Act has provisions about when breaks in employment are treated as continuous service.
Please refer to FAQ 12 and 13 for further information about the service ‘deeming provisions’ in the LSL Act.
Pro-rata long service leave
9. What is a pro-rata long service leave entitlement?
A pro-rata long service leave entitlement is a payment made to the worker when their employment ends (instead of the worker taking long service leave). A worker is entitled to pro-rata leave when they have completed:
At least 5 years but less than 10 years of continuous service AND their employment ends because:
the employer terminates the employment for any reason other than serious or wilful misconduct
OR
the worker terminates their employment on account of illness, incapacity, domestic necessity, pressing necessity
OR
the worker dies.
2. At least
10 years continuous service with the same employer,
and their employment ends for any reason
The employer must pay the worker the amount to which they are entitled immediately upon termination or resignation.
To work out a worker’s pro-rata long service leave accrual, you can use the
Long Service Leave Accrual Calculator
.
Example
Dean started working at Blockbuster as a part time worker on 1 November 2009 whilst studying his law degree at university. The store Dean worked at closed down on 1 May 2015 and Dean’s employment was terminated.
Dean completed more than 5 years but less than 10 years of continuous service. His employment ended because the employer terminated the employment for a reason other than serious or wilful misconduct. Dean is entitled to a pro-rata long service leave payment. Using the Long Service Leave Accrual Calculator, Dean’s pro-rata entitlement is 4.76 weeks.
10. What is illness, incapacity, domestic or other pressing necessity?
If a worker with more than 5 years but less than 10 years of continuous service terminates their employment and claims a pro-rata long service leave entitlement, they must show that their resignation was
caused
by a qualifying reason. A qualifying reason is:
Illness,
Incapacity,
Domestic necessity, or
Other pressing necessity.
that led to resignation.
The qualifying reason must be the worker’s
genuine motivating reason
for terminating their employment, but it does not need to be the sole reason. It must be
reasonable
for the worker to have terminated their employment in the circumstances.
The
worker must prove
that the qualifying reason caused their termination to the civil standard of evidence known as the
balance of probabilities
. This means it must be more likely than not that the qualifying reason caused their termination.
Illness and incapacity are generally more straightforward to assess, as they are often supported by medical evidence showing that the worker could not continue in their role.
Domestic and other pressing necessity are more complex and will depend on the worker’s individual circumstances. A domestic or other pressing necessity is not simply a lifestyle choice or personal preference. It must be a genuine necessity that reasonably led the worker to resign. Evidence that may support the qualifying reason may include but is not limited to:
Evidence of relocation (e.g. plane tickets, rental agreements, letters of offer) showing why relocation was necessary at that time.
Financial information (e.g. bank statements, payslips, or lease or mortgage documents) showing essential financial commitments that led to resignation.
Some examples of domestic or other pressing necessity may include but are not limited to:
Examples of domestic necessity
Example of pressing necessity
Terminating to move to a different location for health reasons of a family member or to keep the family unit together.
Terminating due to insufficient wages to meet essential family financial commitments.
Terminating to marry and relocate to maintain a spousal relationship.
Terminating due to genuinely held concerns about job security.
Terminating to care for a sick spouse or immediate family member with ongoing medical needs.
11. What is serious and wilful misconduct?
If a worker with more than 5 years but less than 10 years’ service is terminated by their employer for serious and wilful misconduct, they will not be entitled to pro-rata long service leave.
An
employer will need to prove
that a worker’s employment was terminated for serious
and
wilful misconduct.
Whether a worker’s misconduct amounts to serious and wilful is fact specific and will depend on:
The terms of the worker’s employment;
The nature of the worker’s employment; and
The work the worker did.
Serious and wilful misconduct is more than poor performance.
Examples
Theft
Fraud
Assault or sexual harassment
Causing serious and imminent risk to the health of another person
Jeopardising the profits of the employer’s business
Refusing to follow reasonable and lawful instructions consistent with the worker’s terms of employment
There are many types of evidence that can show serious and wilful misconduct and the evidence required will depend on the circumstances. Such evidence may include but is not limited to:
Employment contracts or agreements
Workplace conduct policies
Written warnings or disciplinary action reports
Email or other written correspondence between the employer and the worker
CCTV footage or photos
Internet or computer usage history logs.
Long service leave accrual
12. What absences from work break continuous service?
Generally, continuous service will be broken if:
An employer terminates a worker’s contract of employment and does not re-employ the worker within 2 months.
A worker resigns from their employment or shows an unwillingness or inability to perform their obligations under their employment contract (unless on account of illness/injury or in connection with an industrial dispute).
If a worker is re-employed by the same employer after more than 2 months, the worker’s long service leave starts accruing from the date of re-engagement. The worker’s previous service does not count unless the LSL Act treats the break as continuous service. Please refer to FAQ 14 for information on absences which count as service.
13. What absences from work do not break continuous service and count as service?
The LSL Act sets out what absences from work will
not
break a worker’s continuous service, at section 4(11)(a1).
NSW Industrial Relations encourages employers and workers to keep a record of the dates of any absences from work and the reasons for those absences.
Continuous service will
not
be broken and will count towards the worker’s service period if:
Absence
Breaks continuous service
Counts in calculation of period of service
A term of the worker’s employment causes the worker to be absent from work
No
Yes
The worker is absent from work because they are ill or injured
No
Yes
A worker is absent from work because they are subject to a JobKeeper enabling direction
No
Yes
A worker is absent from work because they are subject to a COVID-19 stand-down
No
Yes
Example
Stephanie worked as a full-time receptionist for the same employer for 12 years, commencing on 10 February 2015. Stephanie resigned on 30 December 2025. Stephanie had an accident and broke both of her arms in June 2020 and was absent from work on sick leave for 8 weeks.
Stephanie’s 56-day (8-weeks x 7 calendar days) absence did not break her continuous service with her employer, and it also counts as service. Assuming Stephanie had no other absences from work, her service period is from 10 February 2015 to 30 December 2025.
14. What absences do not break continuous service but don’t count as service?
The LSL Act sets out what absences from work will
not
break a worker’s continuous service, at section 4(11)(a1).
NSW Industrial Relations encourages employers and workers to keep a record of the dates of any absences from work and the reasons for those absences.
Continuous service will
not
be broken but will NOT count towards the worker’s service period if:
Absence
Breaks continuous service
Counts in calculation of period of service
A worker is absent from work because their employer is avoiding obligations under the LSL Act or sick leave under a NSW industrial instrument
No
No
A worker is absent from work due to an industrial dispute
No
No
The employer does not require a worker to work because of a downturn or slackness of trade
No
No
A worker is absent from work for any other reason (other than the three reasons above) and is re-employed within 2 months
No
No
The employer agrees to a period of unpaid leave for the worker
No
No
A worker is absent from work on unpaid parental leave (unless the worker’s contract says the unpaid parental leave counts as service for long service leave)
No
No
Because the above absences
do not
count as service, this means workers will need to work for a longer period of time to reach a milestone for long service leave entitlement to ‘make up’ for the time which doesn’t count as service.
Please refer to FAQ 19 for information about how to count the absences that do not count as service.
Example
Marina started working as a full-time educator at a childcare centre on 31 July 2000. In 2005, Marina’s employer agreed to a period of 6 months of unpaid leave from 2 May 2005 to 28 October 2005 so Marina could do volunteer work overseas and then return to work.
As the employer agreed to the unpaid absence, Marina’s 182-day absence did not break her continuous service with her employer, but it does not count as service.
Because of this unpaid leave, Marina did not reach the 10-year long service leave milestone on 31 July 2010, even though this was her 10-year anniversary with her employer. She needed 10 years and 182 days of service to reach the milestone.
Marina resigned as she found a new job. Her employment ended on 21 August 2010, after her 10-year anniversary but before completing the additional service.
As a result, Marina did not reach the 10-year milestone and was not entitled to long service leave.
15. How does parental leave impact continuous service?
Periods of paid and unpaid parental leave will not break a worker’s service:
Type of parental leave
Breaks continuous service
Counts in calculation of period of service
Paid parental leave
No
Yes
Unpaid parental leave
(including if the worker is receiving Service Australia Paid Parental Leave)
No
No
Example
Luke has been employed for 9 years as a full-time environmental lawyer with the same employer, starting on 5 March 2016. Luke’s first child was born in January 2024, and he decided to take 12 months of unpaid parental leave from 15 January 2024. He returned to work after his period of leave on 13 January 2025.
When Luke returned to work, he still only had 9 years of service with his employer because he was absent for 364 days. He needs an additional 364 days of service to ‘make up’ for the unpaid parental leave.
16. How does unpaid leave impact continuous service?
If a worker requests to take unpaid leave and the employer agrees to this period of leave, the worker’s continuous service will
not
be broken but the period that the worker is on unpaid leave will
not
count as service unless the unpaid leave request is because of illness or injury (in which case it will not break service and
will count
as service).
NSW Industrial Relations encourages employers and workers to keep a record of when unpaid leave is taken, and the reason why.
Example
Will first started working for a butcher shop on 1 May 2005 and he worked there full-time for 9 years. Will took 4 weeks of paid leave to ski in June 2008, and his employer agreed to Will taking a further 4 weeks of unpaid leave to ski in July 2008.
Will’s 56-days (8 weeks x 7 calendar days) of unpaid leave do not break his continuous service, but they do not count as service.
Before Will was entitled to take long service leave, he needed to work at least an additional 56 days past his 10-year anniversary with the butcher to ‘make up’ for the unpaid leave taken in June and July 2008.
17. How does an absence of sick leave or workers compensation impact continuous service?
Any paid or unpaid absence from work because of illness or injury does not break a worker’s service and counts towards the period of service for long service leave purposes.
18. How do COVID-19 stand downs or JobKeeper directions impact continuous service?
The impact of JobKeeper directions and COVID-19 stand downs on a worker’s continuous service are:
Absence does not break continuous service
Breaks continuous service
Counts in calculation of period of service
A worker is subject to a JobKeeper enabling direction
No
Yes
A worker is stood down without pay due to COVID-19
No
Yes
JobKeeper enabling directions
A JobKeeper enabling direction is a direction given by an employer to a worker pursuant to Division 6 of Part 6-4C of the
Fair Work Act 2009
which allowed employers participating in the JobKeeper wage subsidy program to issue specific types of workforce adjustments (e.g. reduced work hours or days, changed duties or changed work locations).
If a worker was subject to a JobKeeper enabling direction, the period of time of that direction does not break a worker’s continuous service and counts towards the period of service for long service leave purposes.
COVID-19 stand downs
If an employer stood down a worker without pay between 11 March 2020 and 31 March 2022 as a direct or indirect result of the COVID-19 pandemic, the period of time that the worker was stood down does not break a worker’s continuous service and it counts towards the period of service for long service leave purposes. The direction must have been given between 11 March 2020 and 31 March 2022 but it is not a requirement that the worker necessarily returned to work during this period.
Any period relating to a JobKeeper enabling direction of a COVID-19 stand-down should be excluded from an ordinary pay calculation.
Please refer to FAQs 25, 27 and 28 for more information about ordinary pay calculations.
19. How do I calculate absences that do not count as service?
To work out a worker’s long service leave accrual using the
Long Service Leave Accrual calculator
, you will need to know the absences that do not count towards the worker’s service in days.
Please refer to FAQ 14 for information on the types of absences that do not count as service.
When working out total absences (in days) that do not count as service, you need to count each calendar day in the period of the interruption.
Example
James works part‑time on Mondays to Wednesdays. He took 12 weeks of unpaid leave.
Unpaid leave is an absence by leave of the employer (under section 4(11)(a1)(vi)) and does not count as service, but it does not break service.
Calculation: 12 weeks × 7 calendar days = 84 days
84 days do not count as service for James.
Example
Max is a casual worker who usually works 2 shifts per week. He:
was not rostered for 6 weeks due to an unexpected downturn, and
was not rostered for 4 weeks while he was on holidays overseas, with employer approval.
Both periods are an interruption to James’ pattern of service. They do not count as service, but they do not break service. In this case:
the downturn is an absence due to slackness of trade (under section 4(11)(a1)(v))
the overseas period is unpaid leave agreed by the employer (under section 4(11)(a1)(vi)).
Calculation: 10 weeks × 7 calendar days = 70 days
70 days do not count as service for Max.
Employment changes and long service leave accrual
20. What happens to a worker’s long service leave when a business is sold?
When a business is sold, a worker’s continuous service is not automatically broken. The LSL Act says that in certain circumstances, worker’s service will continue with a new employer after a business is sold.
Continuity of service
The continuity of a worker’s service is not considered to be broken if a business is sold in whole or in part and that business:
Continues by the new employer as the same business, and
The worker is employed in that business.
Service with any previous employer(s) of the business counts as service with the new employer.
How does a business continue as the same business?
To establish continuity of a worker’s service after a business is sold, it will need to be established that the new business has continued the same as the old business. Indicators of continuity may include but are not limited to:
Conducting the same main activity
The same ABN
The same name
The same assets
The same stock-in-trade, equipment, premises or staff.
Long service leave liability
The new employer is responsible for the worker’s entire long service leave entitlement including service accrued with the previous employer(s). Contracts for the sale of business cannot lawfully exclude a worker’s entitlement when the business is sold or changes hands.
Record keeping
When a business changes from one employer to another employer, the
long service leave record
for each transferred worker must be transferred from the old employer to the new employer.
Example
Sasha worked as a hairdresser for Hairy Styles for 8 years until Sasha’s manager announced that Hairy Styles was sold to Hair Cuts. The business was re-branded as Hair Cuts but continued to be a hair salon. Sasha continued to work as a hairdresser for Hair Cuts for 2 years.
Sasha’s 8 years of service with Hairy Styles counted towards her service with Hair Cuts for long service leave purposes. After her 2 years of service with Hair Cuts, Sasha was entitled to take long service leave.
21. What if a worker is transferred to a related company?
The continuity of a worker’s service is not considered to be broken if the worker is transferred from the service of one employer to the service of another related employer
within 2 months.
This includes situations where:
One employer is the holding (parent) company of the other, or
Both employers are subsidiaries of the same holding company.
A visual representation of when two companies are related is below:
Example
Kateryna has been working as a waitress for Studio Pop café for 9 years. Studio Pop is a subsidiary of the multinational company Studio Rock, which has decided to bring all the Studio cafes in Sydney under the Studio Rock business and get rid of Studio Pop in Sydney
.
Kateryna will continue to work as a waitress when Studio Rock takes over Studio Pop.
Kateryna will be entitled to take long service leave next year as her previous 9 years’ service with Studio Pop counts as service with Studio Rock.
Example
Rachel has been working as a waitress for Studio Pop café for 4 years. Studio Pop is a subsidiary of the multinational company Studio Rock, which has decided to bring all the Studio cafes in Sydney under the Studio Rock business and get rid of Studio Pop in Sydney. Rachel tells her manager that she doesn’t want to be employed by Studio Rock.
Rachel’s service does not continue with Studio Rock and her long service leave entitlement will be assessed only on her service with Studio Pop. As Rachel only had 4 years’ service, she is not entitled to long service leave.
22. What if a worker has worked as an apprentice?
The continuity of a worker’s service is not considered to be broken if a worker completes their apprenticeship with an employer and enters into an employment contract with the same employer or a related company
within 12 months
of completing the apprenticeship.
In these circumstances, the worker’s service as an apprentice counts as service with the employer for long service leave purposes, and the service is considered continuous.
Refer to FAQ 21 for information on related companies.
23. What if a worker has worked outside of NSW?
Where a worker has worked for the same employer both in and outside of NSW, the time spent working outside of NSW may still count to the worker’s continuous service with the employer if that service has a
substantial connection with NSW at the time when the service occurs.
Relevant factors may include (but are not limited to):
The contract of employment was made in NSW.
The worker received direction to work outside of NSW.
The worker was performing work in accordance with directions coming from NSW.
Example – service counts – substantial connection
Louise has worked for a company headquartered in Sydney for 12 years. Her employment contract was made in NSW, and she reports to a NSW‑based manager. Louise spent 9 months working on a project in Perth 2 years ago before returning to Sydney.
Because Louise’s employer is NSW‑based and she continued to report to a NSW-based manager whilst in Perth, the 9-month period counts towards her continuous service.
Example – service does not count – no substantial connection
Anita was employed by an IT company located in India. While working in India, she provided IT services to an Australian Bank, ‘The Money Bank’, as part of the IT company’s outsourced services.
Although Anita’s work related to an Australian client whilst overseas:
her employment contract was made overseas;
her work was managed overseas; and
her day-to-day directions came from an overseas office.
Seven years later, Anita transferred to NSW and began working directly in NSW with The Money Bank.
Because Anita’s 7 years’ of service in India did not have a substantial connection with NSW at the time it occurred, that period of service does not count towards her continuous service under the LSL Act. Only her service performed in NSW is counted.
If a worker is located outside of NSW and their service has no substantial connection with NSW, please contact the following long service leave agency in the relevant state or territory for further information:
ACT
WorkSafe ACT
NT
NT Government
QLD
Queensland Industrial Relations
SA
SafeWork SA
TAS
WorkSafe Tasmania
VIC
Wage Inspectorate Victoria
WA
Department of Mines, Industry Regulation and Safety
24. What if a worker’s employment type changes during their service period?
A worker is entitled to long service leave based on continuous service with the same employer. A worker’s type of employment does not impact their long service leave entitlement.
It does not matter if the worker has changed status from permanent, casual, part-time or any other basis or has had multiple contracts of employment with that employer, as long as a worker has had continuous service with a single employer for a qualifying period for long service leave.
Please refer to FAQ 8 for further information about continuous service.
Calculating payment for long service leave
25. What is ordinary pay?
Ordinary pay is the amount a worker is entitled to be paid while taking long service leave, or for accrued long service leave when their employment ends.
Ordinary pay includes:
A worker’s
ordinary remuneration
OR
average weekly wage
(the primary component), whichever applies PLUS
The cash value of any
board or lodging
(where applicable) PLUS
The average weekly value of
bonuses or incentives
(where applicable).
The following categories of payments are excluded from ordinary pay calculations:
Amounts paid for shift-work, overtime, and other penalty rates (though casual loading is included); and
Expense-related allowances (including reimbursements) that may be reasonably be expected to be fully expended by a worker to meet costs incurred in the course of their employment.
Any period of time when a worker is subject to a JobKeeper enabling direction or a COVID-19 stand down.
Whether ordinary remuneration or average weekly wage applies as the primary component of a worker’s ordinary pay depends on
how the worker is remunerated under the terms of their employment as at the prescribed date.
Please refer to:
FAQ 27 for information about how to determine how a worker is remunerated at the prescribed date
FAQ 26 for information on the ‘prescribed date’
FAQ 28 for information on the calculation of ordinary pay.
26. What is the prescribed date?
The LSL Act requires a worker’s long service leave entitlement to be calculated as at the “prescribed date.”
The prescribed date is the worker’s end date of service with the employer for the purposes of long service leave.
Current workers
For current workers, the prescribed date is the day before the worker takes long service leave.
Former workers
For workers whose employment has ended the prescribed date is the day before their last day of employment.
27. What type of ordinary pay applies?
The LSL Act provides for two different types of ordinary pay as the primary component of ordinary pay:
1. a worker’s ordinary remuneration
or
2. a worker’s average weekly wage.
The LSL Act provides for two different types of ordinary pay as the primary component of ordinary pay:
a worker’s ordinary remuneration
or
a worker’s average weekly wage.
The type of ordinary pay that applies depends on how the worker is remunerated under the terms of their employment as at the prescribed date.
The LSL Act distinguishes between two categories of workers based on how they are renumerated at the prescribed date:
Wholly
in relation to
an
ordinary time rate of pay fixed
This applies where a worker is paid at a fixed rate of pay, such as:
Workers who are paid a salary tied to standard days and hours worked
Workers paid an hourly rate tied to hours worked (including workers with variable hours, like casual workers)
In these cases, ordinary pay is worked out under section 3(1)(a) of the LSL Act and is the higher of:
the worker’s ordinary remuneration at the prescribed date, or
the worker’s average weekly ordinary remuneration over the previous five years.
This is called the worker’s “
ordinary remuneration
”.
Otherwise than wholly
in relation to
an
ordinary time rate of pay fixed
This applies where a worker is not paid at a fixed rate of pay for ordinary hours worked, for example:
Workers who are paid by commission or output
Workers who are paid multiple rates of pay for different tasks
Workers who are eligible for or entitled to be paid bonuses or incentives.
In these cases, ordinary pay is worked out under section 3(1)(b) of the LSL Act and is the higher of:
the worker’s average weekly wage over the previous 12 months, or
the worker’s average weekly wage over the previous five years, ending on the prescribed date.
This is called the worker’s “
average weekly wage
”.
Refer to Section 6 of the
Long Service Leave Guide (PDF 584.25KB)
for further information about the different types of ordinary pay.
28. How should ordinary pay be calculated?
How a worker’s ordinary pay is calculated depends on how the worker is remunerated at the prescribed date.
Please refer to:
FAQ 27 for information about how to decide which type of ordinary pay applies
FAQ 26 for information on the prescribed date.
If a worker is remunerated
wholly
in relation to
an
ordinary time rate of pay fixed as at the prescribed date, their ordinary pay is calculated by
:
determining their
ordinary remuneration
under section 3(1)(a) of the LSL Act, and
including the cash value of board and lodging (if applicable), and
including the average weekly bonuses and incentives (if applicable).
If a worker is remunerated
otherwise than wholly
in relation to
an
ordinary time rate of pay fixed as at the prescribed date, their ordinary pay is calculated by:
determining their
average weekly wage
under section 3(1)(b) of the LSL Act
,
and
including the cash value of board and lodging (if applicable), and
including the average weekly bonuses and incentives (if applicable).
The
Long Service Leave Guide (PDF 584.25KB)
explains how these components are calculated in detail [Steps 11B, 12 and 13].
Please refer to:
FAQ 27 for more information on how to decide which type of the worker’s ordinary pay applies
FAQ 26 for further information on the prescribed date.
29. How are allowances incorporated into the calculation of ordinary pay?
Allowances are included in ordinary pay for long service leave if they are paid as part of a worker’s regular wages for their service.
Allowances that are expense related (including reimbursements for expenses) are
excluded
from ordinary pay calculations.
Type of allowance
Included in ordinary pay?
Notes
Work/skills/conditions
Yes
Examples: height, heat, first aid paid for all ordinary hours
Shift-work, overtime rates or other penalty rates
No
These amounts compensate for working irregular hours or overtime, not ordinary hours.
Expense related
(including reimbursements)
No
Any payments made to cover work expenses.
Examples:
travel, meal, uniform, car, tools etc.
30. Should board and lodging payments be included in ordinary pay for long service leave?
If a worker receives board or lodging immediately before the prescribed date, the cash value is added to their ordinary pay.
Scenario
Inclusion in ordinary pay calculation
Board/lodging value fixed in worker’s contract/award
Yes.
Add the specified amount onto the worker’s ordinary remuneration calculated under section 3(1)(a) of the LSL Act or onto the worker’s average weekly wage calculated under section 3(1)(b) of the LSL Act.
No value for board/lodging fixed in worker’s contract/award
Yes.
Add $15 per week for board and/or $5 per week for lodging (as applicable) onto the worker’s ordinary remuneration calculated under section 3(1)(a) of the LSL Act or onto the worker’s average weekly wage calculated under section 3(1)(b) of the LSL Act.
No board or lodging provided to the worker immediately before the prescribed date
No.
Please refer to:
FAQ 27 for more information on how to decide which type of the worker’s ordinary pay applies
FAQ 26 for further information on the prescribed date.
31. Should bonus or incentive payments be included in ordinary pay for long service leave?
Bonus and incentive payments are included in the worker’s ordinary pay if they meet the definition of
bonus
or incentive
under the LSL Act.
A payment is treated as a bonus or incentive under the LSL Act if:
it is provided for under the terms of worker’s employment;
it is part of an established bonus or incentive scheme;
it depends on performance or results (not just hours worked); and
it is not the worker’s main form of remuneration.
Refer to the table below for information of what types of bonus or incentive payments can be included in ordinary pay.
If these conditions are met, the payment is included in ordinary pay - subject to the high‑income threshold rules. Bonus and incentive payments are only included in a worker’s ordinary pay if the worker’s annual ordinary pay (calculated without any bonuses/incentives) is below the high‑income threshold.
Only a worker’s past bonuses (over the last 12 months or 5 years) are included in the calculation.
The future bonus amount itself is not included, even if it relates to past performance and is paid after the worker leaves employment.
Refer to Step 13 of the
Long Service Leave Guide (PDF 584.25KB)
for information about how to include bonus and incentive payments in the ordinary pay calculation.
Type of payment
Is it a bonus or incentive under the LSL Act?
Included in ordinary pay?
Notes
Contingent payment made to the worker under an established bonus or incentive scheme
Yes
Yes
Must be a payment provided for in the worker’s terms of employment and part an established scheme.
The payment must depend on factors other than hours worked and duties performed.
A payment can still be a bonus even if the employer has discretion over the amount, as long as it is part of an established scheme.
The worker must be eligible for the payment at the prescribed date.
Example:
a worker receives a yearly bonus based on company or individual performance
Commission-only remuneration or piece work rate remuneration
No
Yes
Where these payments are the sole or primary means of a worker’s remuneration (i.e. the worker
only
earns commission or is
only
paid for results or output), they are treated as the worker’s average weekly wage calculated under section 3(1)(b) of the LSL Act (per Step 10B of the
Long Service Leave Guide (PDF 584.25KB)
. These payments are not treated as bonus and incentive payments.
Example
: Worker only earns commission on sales made (and no base salary)
Commission payments on top of base wages
Yes
Yes
The commission payments must be payments made to the worker in addition to their primary remuneration.
Example:
worker receives a base salary plus sales commission
One-off ex gratia payment to worker
No
No
These payments are entirely at the employer’s discretion and not provided for under a scheme in the worker’s terms of employment.
Example:
worker receives a random and unexpected one-time ‘Christmas bonus’
Long service leave for workers with variable hours
32. Who are workers with variable hours?
A worker has variable hours if the number of hours worked by the worker each week are not fixed under the terms of the worker’s employment. This contrasts with full-time workers who work a fixed number of hours per week set by the terms of their employment.
Generally, workers with variable hours are:
workers employed as casual workers working different hours every week; or
workers employed as part-time workers who work more than the number of hours fixed in their written contract of employment and who are remunerated for the additional hours worked at the same rate of pay as their contracted hours (and not by overtime, penalty or shift work rates); or
workers whose hours vary significantly from week to week.
A worker can have variable hours even if they have worked regularly or long‑term for the same employer.
33. Are casual workers entitled to long service leave?
Casual workers in NSW are entitled to long service leave under the LSL Act, provided they have a qualifying period of continuous service with the same employer.
What does continuous service mean for a casual worker?
The starting point for casual workers is that each engagement (i.e. “shift”) constitutes its own contract of employment. There will be days in between these engagements where the casual does not work.
Because each engagement is its own contract, there is a two-step approach to determining continuous service for casuals:
Establish a pattern of a series of engagements:
continuous service for casuals can be achieved through the provisions in the Act (s. 4(11)(a1)) which provide a mechanism to ‘string together’ each engagement such that the engagements constitute a
series
or
pattern
which give rise to an
ongoing employment relationship
. An ongoing employment relationship is necessary for continuous service.
Characterise interruptions to the pattern:
there will always be interruptions to a casual’s service (i.e. days where a casual does not work). Interruptions categorised under s. 4(11)(a1) of the Act do not break service. If interruptions cannot be categorised under s. 4(11)(a1), the worker’s service is broken. See Table 1 below.
The assessment of continuous service and the categorisation of interruptions to service are made on a case-by-case basis considering:
The
regularity
of the casual worker’s engagements ;
The
time
between the worker’s engagements; and
The
reasons
for the interruptions between the worker’s engagements.
Please refer to FAQs 12, 13 and 14 for further information on categorising interruptions to a worker’s service.
Example
Diana works casually as a stable hand and she usually works 3 shifts per week.
Diana’s pattern of service in a week is to regularly work 3 times, and to be absent from work 4 times. The reasons for the absences are because Diana and her employer agree that she only works 3 shifts per week.
The 4 days of interruptions to Diana’s service in a week are absences under the terms of her employment and they do not break her continuous service and they count as service (under section 4(11)(a1)(i)).
Table 1
Type of Absence
Breaks continuous service?
Counts toward period of service?
A term of the worker’s employment causes the worker to be absent from work
No
Yes
The worker is absent from work because they are ill or injured
No
Yes
A worker is absent from work because they are subject to a JobKeeper enabling direction
No
Yes
A worker is absent from work because they are subject to a COVID-19 stand-down
No
Yes
A worker is absent from work because their employer is avoiding obligations under the LSL Act or sick leave
No
No
A worker is absent from work in connection with an industrial dispute
No
No
The employer does not require a worker to work because of slackness of trade
No
No
The employer agrees to a period of unpaid leave for the worker
No
No
A worker is absent from work for any other reason and is re-employed within 2 months
No
No
A worker is absent from work on unpaid parental leave
No
No
34. How is long service leave paid for workers with variable hours?
Just like for workers with fixed hours, how long service leave is paid for workers with variable hours will depend on how the worker is remunerated as at the prescribed date.
Variable hours workers are typically paid at a fixed hourly rate and so these workers are generally treated as being remunerated
wholly
in relation to
an
ordinary time rate of pay fixed.
If this is the case, their ordinary pay is calculated by:
determining their
ordinary remuneration
under section 3(1)(a) of the LSL Act, and
including the cash value of board and lodging (if applicable), and
including the average weekly bonuses and incentives (if applicable).
The same information about calculating ordinary pay for workers with fixed hours is relevant to workers with variable hours – please refer to FAQs 25-31.
The
Long Service Leave Guide (PDF 584.25KB)
explains how these components are calculated in detail specifically for workers with variable hours whose average hours over the past 12 months and 5 years need to be determined in order to calculate their ordinary remuneration under section 3(1)(a) [Steps 11A, 12 and 13].
Paying long service leave
35. When does an employer need to pay long service leave?
Long service leave is only paid if the worker has met the entitlement requirements under the LSL Act. It is then paid when a worker takes the leave or is taken to have taken the leave (for example, when a worker’s employment ends).
Current workers
If a worker is still employed and taking long service leave, the employer is required to pay long service leave:
in full when the worker commences the period of leave, or
at the same time as the worker’s ordinary pay would have been paid if they remained on duty,
in any other way as agreed with the worker.
Workers whose employment has ended
If a worker’s employment ends and they are entitled to long service leave, the employer must pay the worker any accrued and untaken long service leave immediately from the date the employment ends.
Where a worker dies
If a worker dies and was entitled to long service leave, the employer is required to pay accrued and untaken long service leave to that worker’s personal representative upon the representative’s request.
It is an offence not to pay a worker
It is an offence for an employer not to pay a worker their long service leave entitlement when it is due. Failing to do so is against the law and can result in court action and a criminal conviction if found guilty.
36. What if the worker gets a pay increase during leave?
The amount that a worker is to be paid whilst they are on long service leave (i.e. the worker’s ordinary pay) is calculated as at the prescribed date.
If a worker gets a pay increase during long service leave, the ordinary pay is not increased to reflect the higher pay rate.
Please refer to:
FAQs 25, 27 and 28 for more information on calculating ordinary pay
FAQ 26 for further information on the prescribed date.
37. What if a worker is made redundant?
If a worker is made redundant and their employment is terminated by their employer, the employer is required to pay the worker any accrued and untaken long service leave provided the worker has continuous service with that employer for at least 5 years.
38. What if a worker retires?
If a worker retires, the employer is required to pay the worker any accrued and untaken long service leave if the worker is entitled to long service leave under the LSL Act.
This may include a pro‑rata payment where the employee has at least five years’ continuous service and the statutory conditions for pro‑rata entitlement are satisfied.
Where the employee has completed 10 or more years’ continuous service, any accrued and untaken long service leave must be paid on termination, in accordance with the Act.
39. What if a worker is dismissed for serious and wilful misconduct?
Whether a worker who is dismissed for serious and wilful misconduct is entitled to a long service leave payment from their employer depends on how long they have worked for the employer:
Length of Continuous service
Long service leave entitlement
Less than 5 years
No long service leave payment
Between 5 to 10 years
No long service leave payment if the worker’s misconduct was serious AND wilful.
Otherwise, the worker is entitled to pro-rata long service leave.
10+ years
Entitled to a pro-rata long service leave payment.
Please refer to FAQ 11 for further information about serious and wilful misconduct.
40. What if a worker has given notice of resignation?
If a worker has given the employer a notice of resignation, the employer is required to assess the worker’s entitlement to and accrual of long service leave and to calculate the amount of ordinary pay due to the worker for their long service leave as at the prescribed date (i.e. the day before the worker’s last day of work).
Please refer to:
FAQs 25, 27 and 28 for more information on calculating ordinary pay
FAQ 26 for further information on the prescribed date.
Taking long service leave
41. When should a worker take long service leave?
A worker should take long service leave as soon as reasonably practical after becoming entitled to it, having regards to the needs of the employer’s business.
An employer is required to provide long service leave in accordance with the LSL Act. The timing of the leave should be agreed between the worker and the employer.
The worker and employer may also agree:
to postpone the long service leave to a later date.
for the worker to take long service leave before they are entitled to it. Any long service leave taken in advance will be deducted from the entitlement the worker later accrues.
The worker and employer should each keep a copy of any agreement(s) made.
42. How can a worker take long service leave?
Long service leave should be taken in one continuous period of leave.
Alternatively, if the worker and employer agree, long service leave may be taken in separate periods of not less than 1 day:
in 2 separate periods where the amount of leave is 2 months
in 2 or 3 separate periods where the amount of leave is greater than 2 months
in 2, 3 or 4 separate periods where the mount of leave is greater than 19.5 weeks.
The worker and employer should each keep a copy of any long service leave agreement(s) made.
43. Can long service leave be taken in advance?
Long service leave may be taken in advance where the employer and worker agree (i.e. before the completion of 10 years’ continuous service or of each 5 years of continuous service thereafter).
An employer is not obliged to grant a worker’s request to take long service leave in advance.
Any long service leave taken in advance will be subtracted from the entitlement that the worker later accrues.
If the worker’s employment ends before the service requirements are met, the employer may recover the value of any long service leave taken in advance, to the extent permitted by law.
The worker and employer should each keep a copy of any long service leave agreement(s) made.
44. Can long service leave be postponed?
Long service leave may be postponed to a future date where the employer and worker agree. The worker and employer may also agree to set the worker’s ordinary pay rate as at the date the postponement agreement is made.
This means the leave will be paid based on the worker’s ordinary pay rate on the date the agreement to postpone was entered into, rather than the date the leave is eventually taken.
The worker and employer should each keep a copy of any agreement(s) made.
45. When can a worker take long service leave after 10 years?
A worker becomes entitled to take 8.67 weeks (2 months) long service leave after completing 10 years of continuous service with the same employer.
Each 5 years thereafter (e.g. 15, 20, 25 years etc.), there will be an entitlement to a further 4.33 weeks (1 month) paid leave.
If the worker is terminated or ceases work for any reason after 10 years' service, they are entitled to pro-rata long service leave calculated proportionately based on the worker’s total service.
46. Can an employer direct a worker to take long service leave?
An employer may ask a worker to take long service leave by giving the worker at least 1 months’ notice. The worker and employer may agree to a shorter notice period. Employers should seek legal advice to ensure any direction to take long service leave is reasonable.
Workers don’t have to provide a specific period of notice to their employer to request long service leave. However, NSW Industrial Relations suggests it is advisable if both sides discuss a mutually agreeable time for the leave. If there is no agreement and the business requires the worker to take leave at a specified time, the employer should show that they have attempted to reach a consensus with the worker.
47. Can a worker take long service leave at half pay?
Long service leave must be paid at the worker’s ordinary pay, calculated as at the prescribed date. The LSL Act is silent about whether a worker may take long service leave at half pay.
Please refer to:
FAQs 25, 27 and 28 for more information on calculating ordinary pay
FAQ 26 for further information on the prescribed date.
48. Can a worker change to another type of leave while on long service leave?
Long service leave is a separate statutory entitlement and is generally taken as long service leave once it has begun.
The LSL Act does not provide a mechanism for long service leave to be converted to another type of leave (such as sick leave, annual leave or any other type of leave) once it has commenced, nor does it provide for long service leave to be automatically re-credited.
However, the LSL Act does not expressly prohibit such an arrangement. Any variation would therefore depend on the applicable industrial instrument (such as an award or enterprise agreement) or an agreement between the employer and the worker.
49. Is long service leave paid out when employment ends?
Whether long service leave is paid out when employment ends depends on the worker’s length of continuous service and the reason the employment ends.
Length of Continuous service
Long service leave entitlement
Less than 5 years
No long service leave payment
Between 5 to 10 years
The worker is entitled to a pro-rata long service payment if:
Worker is terminated by the employer for any reason other than serious and wilful misconduct
Worker resigns on account of illness, incapacity, domestic or other pressing necessity
Worker dies
10+ years
Entitled to a pro-rata long service leave payment if employment ends for any reason.
It is an offence not to pay a worker
Long service leave that is payable must be paid at the time employment ends. Failure to pay long service leave when it is due is an offence.
50. What if an employer cannot locate a former worker to pay long service leave?
If long service leave is payable to a worker under the LSL Act and, after making reasonable attempts, the employer cannot locate the former worker, the employer must still deal with the unpaid amount.
Under section 122 of the
Industrial Relations Act 1996 (NSW)
, if:
The employer is liable to pay an amount to a former worker;
The employer has exercised reasonable diligence to locate the worker; and
30 days have passed since the employment ended,
the amount must be paid to NSW Industrial Relations (
NSW IR
) for deposit with the NSW Treasury.
Once payment is made, NSW IR will issue a receipt. This receipt is a sufficient discharge of the employer’s liability.
If the Treasurer is later satisfied that the former worker is entitled to the money, the amount will be paid to that person.
This process applies to long service leave payable under the LSL Act. It does not apply to wages, annual leave, or other National Employment Standards (NES) entitlements.
If an employer is required to make a payment under section 122, they should contact NSW IR.
If a former worker believes their long service leave has been paid to NSW Industrial Relations, they can
contact us
.
51. Can an employer pay a worker in lieu of the worker taking long service leave?
Long service leave cannot be cashed out. It is an offence to give or receive payment for long service leave instead of taking the leave. A criminal conviction may also be recorded if either or both the employer and worker are found guilty of the offence.
An employer can pay a worker for their accrued and untaken long service leave only if the worker’s employment ends before the leave is taken.
Refer to FAQ 49 for information about paying leave when employment ends.
52. What happens if a public holiday occurs during a period of long service leave?
If a public holiday falls during a worker’s long service leave, the effect depends on whether the worker would normally be entitled to be paid for that day under their employment terms:
If the worker is entitled to be paid for the public holiday:
The public holiday is not deducted from the worker’s long service leave balance.
The period of leave is extended by one day for each public holiday that occurs during their leave.
The worker is paid for the public holiday as normal.
Example:
a full-time worker who ordinarily works 5 days per week will have their leave extended.
If the worker is not entitled to be paid for the public holiday:
The public holiday does not affect the long service leave period.
Example:
a part-time worker whose roster does not include the public holiday, or a casual worker not entitled to paid public holidays, will not have their leave extended.
53. Can a worker work elsewhere during a period of long service leave?
The LSL Act does not prevent a worker, who is on long service leave, from working with another employer.
However, the intent of long service leave is to provide workers with a period of rest and recuperation after a long period of service with an employer.
A worker should consider whether their employer has a policy that addresses this issue.
54. What happens to a worker’s long service leave if the employer is in liquidation or insolvent?
NSW Industrial Relations is unable to assist in the recovery of entitlements to workers whose employer has gone into liquidation.
Workers need to
make a claim
with the
Receiver
. For more information about receivership, please contact the
Australian Securities and Investment Commission
(ASIC) on 1300 300 630, or visit their website at:
https://asic.gov.au/
.
The
Fair Entitlements Guarantee
(FEG) assists workers who have lost their employment due to the insolvency or bankruptcy of their employer, and who are owed certain worker entitlements. For more information, please call
1300 135 040
or visit their website at:
https://www.dewr.gov.au/fair-entitlements-guarantee
.
Recordkeeping
55. What records is an employer required to keep for long service leave?
Employers must keep employee records relating to long service leave throughout a worker’s service.
The employer must keep these records for at least 6 years following the termination of the workers employment (whether by resignation, retirement or other form of termination).
There are penalties for failure by the employer to maintain these records.
All employers must keep records under the LSL Act
All employers must keep a Long Service Leave Record for each worker.
These requirements are set out in section 8 of the LSL
Act
and clauses 4B and 4C of the
Long Service Leave Regulation 2021
.
All employers must keep records under the
Industrial Relations Act 1996
All employers must keep daily records of remuneration paid and hours worked by the worker and any other prescribed records relating to conditions of employment set by industrial relations legislation or industrial instruments.
These requirements are set out in section 129 of the
Industrial Relations Act 1996
and clauses 9, 10, 11 and 12 of the
Industrial Relations (General) Regulation 2020
.
Employers who are selling their business must transfer records
All employers who are selling their business must transfer to the new employer all records relating to any transferred employee that the employer is required to keep under section 8 of the LSL Act.
The former employer must keep the transferred records for 6 years after they were made.
This requirement is set out in clause 4E of the
Long Service Leave Regulation 2021
.
Training and resources
Access training at
Archived Long Service Leave FAQs
Long Service Leave eLearning module
Long Service Leave Champion Course
For further information and factsheets see
Keeping employment records
Summary guide: Long service leave entitlements
For more about leave in general see
Taking leave
For NSW public service leave information see
NSW Public Service Industrial Relations Guide
You can also access the
Long Service Leave Calculator
Contact NSW Industrial Relations
Online:
Contact us
Phone:
131 628
TTY
1800 555 677
Language assistance: Call TIS
131 450
Post:
GPO Box 5341 Sydney NSW 2001
Website:
www.nsw.gov.au/industrialrelations
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