Super is payable at 12% on long service leave you take or cash out while you are still employed, but not on long service leave paid out when your employment ends, whatever the reason you leave. The leave is the same in each case. What changes the answer is whether you are still employed on the day the money is paid. Since 1 July 2026 the super guarantee has been charged on qualifying earnings, and the Act strips a termination lump sum for unused long service leave out of that base by name. This guide gives the super answer for each way long service leave can be paid, the Payday Super due date for leave pay, the super you give up by leaving with the balance untaken, and the one way to move part of a payout into super yourself.
Key takeaways
- Leave you take: 12% super on the leave pay, including leave taken at half pay.
- Cashed out while you stay employed: 12% super, but only where your state or territory allows a cash-out.
- Paid out when the job ends: no super. The reason you leave, from resignation to redundancy, does not change it.
- Paid by a portable scheme administrator: no super.
- On 13 weeks of leave at $1,800 a week, taking the leave instead of a payout is worth $2,808.00 in super.
- A payout cannot be rolled over into super. The route in is a personal contribution you claim as a tax deduction.
Which long service leave payments attract super
Long service leave reaches you in one of five ways, and the super answer turns on which one.
| How the long service leave is paid | Super guarantee? | The 12% is worked out on |
|---|---|---|
| Taken as paid leave while you are employed | Yes | The leave pay, each time it is paid |
| Taken at half pay for twice as long, where that is allowed | Yes | Each half-pay amount you receive |
| Cashed out while you stay employed, where your state allows it | Yes | The cash-out payment |
| Paid out when your employment ends, for any reason | No | Nothing |
| Paid to you by a portable scheme administrator | No | Nothing |
The split comes from the way the Act is put together. Section 6(1) of the Superannuation Guarantee (Administration) Act 1992 defines ordinary time earnings and, inside that same definition, leaves out a lump sum for unused long service leave paid on the termination of employment. Section 10A(1)(a) then makes ordinary time earnings part of qualifying earnings, and section 17A charges 12% on each payment of qualifying earnings. A long service leave payment made while you remain employed never meets the "on termination" condition, so it stays inside the base.
A "No" in the table is the legal minimum, not always the final word. The ATO notes that an award or agreement can require super on payments that fall outside ordinary time earnings, so check your industrial instrument before you accept a zero. Annual leave follows the same broad pattern, with an extra question about leave loading: see superannuation on annual leave.
Superannuation Guarantee (Administration) Act 1992, Compilation No. 78, in force 1 July 2026, ss 6(1), 10A(1)(a) and 17A, retrieved 9 September 2026. ATO, What payments are qualifying earnings (QC105843), Tables 2, 6, 7 and 13 and the note on industrial instruments ("You may have additional super obligations under an industrial instrument (award or agreement) to pay super on amounts that are not ordinary time earnings."), last updated 2 September 2026. Rate: ATO, Super guarantee (QC18123), "1 July 2026 to 30 June 2027 | 12.00", last updated 17 April 2026.
Long service leave you take: 12% super
Pay for long service leave you take is treated as your ordinary pay carrying on while you are away. You do no work during the leave, but the ATO's draft ruling ties the payment to the ordinary hours you would otherwise have worked: "Leave payments that an employee receives while on annual leave, long service leave or sick leave is in respect of their ordinary hours of work and is OTE." (LCR 2026/D1, draft, paragraph 60.)
Being ordinary time earnings, it is also qualifying earnings, and your employer owes 12% of every dollar of it. That holds whether the leave is paid as one amount when it starts or spread across your normal paydays.
At half pay. Paragraph 59 of the same draft describes paid leave at a rate "at or below their normal rate of pay for ordinary hours of work" as "simply a continuation of their ordinary pay". Half pay sits inside the words "at or below", so the 12% applies to each half-pay amount actually paid to you. Half the pay over twice the time gives half the super each week over twice as many weeks, so on an unchanged pay rate the total super ends up the same as for full-pay leave. Whether you can take the leave at half pay at all is a separate question, answered by your state's rules.
High earners. The super guarantee stops at the maximum contribution base, which became an annual figure from 2026-27 and is $270,830 of qualifying earnings for that year. Leave pay stands in for your normal wages rather than adding to them, so for most people taking long service leave does not move them closer to that limit.
The ATO states that its finalisation "is pending the outcome of the appeal process from the Federal Court's decision in Department of Education v Commissioner of Taxation [2026] FCA 898". Its paragraphs are the ATO's current view, not settled law. Draft status checked 6 October 2026.
ATO, LCR 2026/D1 Payday Super: qualifying earnings (draft), paragraphs 59 and 60, retrieved 9 September 2026. ATO, Super guarantee (QC18123), maximum contribution base "2026-27 | $270,830", last updated 17 April 2026.
Cashing out while employed: super, if your state allows it
If you and your employer convert some of your long service leave into cash while you keep working, the cash-out carries 12% super. The ATO's qualifying earnings table lists "Cashed out long service leave in service" as both ordinary time earnings and qualifying earnings, and the draft ruling explains why the termination exclusion does not touch it: "Although unused long service leave paid as a lump sum on termination is specifically excluded from OTE by its definition in subsection 6(1), if a payment for unused long service leave occurs while the employee remains employed, this amount is paid in connection with the employee's ordinary hours in the same way as any other long service leave payment. Therefore, the payment of unused long service leave entitlements while still employed is included in OTE." (LCR 2026/D1, draft, paragraph 67.)
Whether a cash-out can happen at all depends on where you work. Western Australia, South Australia and Tasmania allow it by agreement once the leave has accrued, NSW and the Northern Territory do not allow it, and Victoria and Queensland allow it only in narrow cases. Each is set out with its conditions in cashing out long service leave.
Watch the words "cashed out". Many people say "cashed out" when they mean the lump sum paid on leaving a job. For super the two are opposites: a cash-out during employment attracts 12%, and a payout at the end attracts nothing. A summary saying long service leave "cashed out" on leaving gets no super is describing a termination payout.
Tom earns $1,800 a week and has 15 years' continuous service, which gives him 8 2/3 weeks for the first 10 years and 4 1/3 weeks for the next 5. He takes the first block as leave and, by agreement with his employer, cashes out the second.
- Leave taken: 26/3 weeks x $1,800 = $15,600.00. Super at 12% = $1,872.00.
- Cash-out: 13/3 weeks x $1,800 = $7,800.00. Super at 12% = $936.00.
- Total super: $1,872.00 + $936.00 = $2,808.00, the same as if he had taken all 13 weeks as leave.
ATO, What payments are qualifying earnings (QC105843), Table 6, "Cashed out long service leave in service": ordinary time earnings yes, qualifying earnings yes, last updated 2 September 2026. LCR 2026/D1 (draft), paragraph 67, retrieved 9 September 2026. Long Service Leave Act 1958 (WA) s 8(2): "(a) in respect of 10 years so completed, 8 2/3 weeks; (b) in respect of each 5 years' continuous employment so completed after such 10 years, 4 1/3 weeks", consolidation 04-m0-00, retrieved 30 September 2026. Cash-out provisions: Long Service Leave Act 1955 (NSW) s 4(8); Long Service Leave Act 2018 (Vic) s 34; Industrial Relations Act 2016 (Qld) s 110; Long Service Leave Act 1958 (WA) s 5; Long Service Leave Act 1987 (SA) s 5(1a); Long Service Leave Act 1976 (Tas) s 10; Long Service Leave Act 1981 (NT) s 10(4); each retrieved 30 September 2026. Pay rate illustrative.
Long service leave paid out on termination: no super
When your employment ends with long service leave still owing, the lump sum your employer pays for it carries no super guarantee. It makes no difference whether you resign, retire, are dismissed or are made redundant, or how the payout is taxed.
The exclusion is part of the Act's definition of ordinary time earnings, which leaves out "a lump sum payment of any of the following kinds made to the person on the termination of the person's employment", including "(d) an unused annual leave payment, or unused long service leave payment, within the meaning of the Income Tax Assessment Act 1997". The ATO's tables apply it twice. Table 7 lists long service leave accrued after 17 August 1993 and paid on a normal termination as neither ordinary time earnings nor qualifying earnings. Table 13 does the same for all unused leave on termination, long service leave included, and adds that the rule "applies regardless of the reason for termination or treatment for tax purposes".
Other lines on the same final pay are treated differently, and super on termination payments goes through each one. Whether you are owed a payout at all, and how much, depends on your state and your years of service: see pro-rata long service leave, or for NSW, long service leave payout in NSW.
Superannuation Guarantee (Administration) Act 1992 s 6(1), Compilation No. 78, in force 1 July 2026, retrieved 9 September 2026. ATO, What payments are qualifying earnings (QC105843), Table 7 ("Long service leave accrued after 17 August 1993 paid on a normal termination") and Table 13 ("Unused leave on termination, including annual leave, annual leave loading and long service leave."), last updated 2 September 2026. LCR 2026/D1 (draft), paragraph 81, retrieved 9 September 2026. ATO, When a worker leaves your business (QC67964): unused leave payments "don't form part of an employee's ordinary time earnings or qualifying earnings", last updated 9 June 2026.
Portable long service leave schemes: no super on the scheme payment
Some industries, building and construction among them, have portable long service leave schemes, where a scheme administrator rather than your employer pays the leave. When the administrator pays it, the ATO lists the payment as neither ordinary time earnings nor qualifying earnings, so nobody owes super guarantee on it. Which schemes exist, and who runs them, is set out in portable long service leave by state.
ATO, What payments are qualifying earnings (QC105843), Table 2: "Long service leave that is paid by a scheme administrator under a portable long service leave scheme." Ordinary time earnings no, qualifying earnings no. Last updated 2 September 2026.
When the super on long service leave is due
Payday Super started on 1 July 2026, and it ties super to each payment instead of to a period:
- Each payment of leave pay is a payment of qualifying earnings on the day it is made, and the 12% is charged on that payment.
- That applies to long service leave paid on or after 1 July 2026 even though most of the service behind it came earlier. The ATO's ruling on the changeover says the new law covers qualifying earnings paid from that date "that relate to work, labour or performance of duties before, on or after 1 July 2026".
- The contribution is on time only if your fund receives it within 7 business days after you are paid. Saturdays, Sundays and any public holiday that applies across an entire state or territory are not business days.
How your leave is paid sets the dates. In NSW, for example, the Act lets your employer pay the leave in full when it starts, at the times your ordinary pay would have been paid had you stayed at work, or in another way the two of you agree.
Priya earns $1,800 a week and has 15 years' service. Under the NSW Act that is 2 months for the first 10 years plus 1 month for the next 5, and a month is 4 1/3 weeks, so 3 months = 13 weeks.
- Leave pay: 13 x $1,800 = $23,400.00.
- Super: 12% x $23,400 = $2,808.00.
- Her employer pays the leave on her usual fortnightly paydays: six payments of $3,600.00, each carrying $432.00 of super, and a last one-week payment of $1,800.00 carrying $216.00. Check: 6 x $432 + $216 = $2,808.00.
- Her first leave payday is Thursday 12 November 2026, so that $432.00 must reach her fund by Monday 23 November 2026. The 7 business days are 13, 16, 17, 18, 19, 20 and 23 November, with no whole-state public holiday among them.
Superannuation Guarantee (Administration) Act 1992 s 17A(1) and s 6(1) "usual period": "(a) starting on the QE day; and (b) ending on the seventh business day after the QE day", Compilation No. 78, retrieved 9 September 2026. ATO, Payment deadlines for Payday Super (QC105846): on time "if it is received by your employee's super fund ... within 7 business days after paying your employee"; a business day is any day other than "a Saturday or Sunday; a day that is a public holiday for the whole of any Australian state or territory", last updated 29 September 2026. ATO, LCR 2026/1 Payday Super: application and transitional provisions, paragraph 8, published 5 August 2026. Long Service Leave Act 1955 (NSW) s 4(2)(a)(i), s 4(2)(a3) ("month means 4 and one-third weeks") and s 4(7), current version for 1 July 2025, retrieved 5 October 2026. Pay rate illustrative.
Take the leave or take the payout? The super difference
Now suppose Priya resigns with the same 13 weeks untaken. Her payout is the same $23,400.00. Her super is not.
| Priya, $1,800 a week, 13 weeks owing | Takes the leave | Resigns and is paid out |
|---|---|---|
| Amount paid | $23,400.00 | $23,400.00 |
| Super guarantee at 12% | $2,808.00 | $0.00 |
| Why | Leave pay is qualifying earnings | Termination lump sum excluded by s 6(1)(d) |
The $2,808.00 difference is before contributions tax and fund earnings. Taking the leave, or cashing it out while employed where your state allows that, are the only ways a long service leave balance produces super.
Tax differs as well. Long service leave for service after 17 August 1993, paid out on a normal termination, is taxed at your marginal rates along with your salary and wages; the older service periods, and payouts on redundancy, invalidity or an early retirement scheme, have their own rates. The long service leave tax calculator works out what you keep. These figures are base pay only. Whether a loading is added to long service leave pay is covered in leave loading on long service leave.
ATO, Schedule 7, unused leave payments on termination (QC107125), published 17 June 2026, for payments from 1 July 2026: post-17 August 1993 long service leave on a normal termination, "Marginal rates | Include in salary/wages"; on redundancy, invalidity or an early retirement scheme, "32% | A". Superannuation Guarantee (Administration) Act 1992 s 6(1)(d). ATO, What payments are qualifying earnings (QC105843), Table 13, last updated 2 September 2026.
Can you put long service leave into super?
Not directly. A long service leave payout cannot be rolled over into super. The ATO says "You can't roll over your ETP to your superannuation", and a lump sum for unused long service leave is not even an ETP. What you can do is pay part of the payout into your fund yourself and claim it as a tax deduction:
- Contribute the amount to your super fund.
- Give your fund a notice of intent to claim a deduction, in the approved form, and get the fund's acknowledgment. The deadline is the earlier of lodging your tax return for that year and the end of the following income year.
- Stay within the cap. Deductible personal contributions count towards the concessional contributions cap, which is $32,500 from 1 July 2026.
- Check carry-forward. If your total super balance was under $500,000 on 30 June of the previous financial year, unused cap amounts from up to 5 earlier years can add room.
Illustrative, at 2026-27 rates. Assume her 2026-27 taxable income, including the $23,400.00 payout, is $117,000, which sits in the 30% bracket ($45,001 to $135,000).
- She contributes $10,000.00, lodges her notice of intent and receives the fund's acknowledgment before lodging her return.
- The deduction cuts her taxable income to $107,000, still in the 30% bracket, and saves 30% + 2% Medicare levy = 32% x $10,000 = $3,200.00 of personal tax.
- Her fund deducts 15% contributions tax: 15% x $10,000 = $1,500.00.
- Net tax saving: $3,200.00 minus $1,500.00 = $1,700.00, and $8,500.00 stays in her super.
- The contribution uses $10,000 of her $32,500 concessional cap. Her real saving depends on her actual marginal rate for the year.
ATO, Employment termination payments for employees (QC27127): "ETPs don't include: lump sum payments for unused annual or long service leave"; "You can't roll over your ETP to your superannuation", last updated 5 June 2026. ATO, Personal super contributions: "To claim a deduction for your personal super contributions, you must give your super fund a notice in the approved form and get an acknowledgment from the fund"; deductions "will count towards your concessional contributions cap", retrieved 6 October 2026. ATO, Contributions caps: "From 1 July 2026, the general concessional contributions cap is $32,500"; carry-forward for a total superannuation balance "of less than $500,000 on 30 June of the previous financial year", "Unused amounts are available for a maximum of 5 years", last updated 11 September 2026. ATO resident tax rates 2026-27 (QC73320): "$45,001 to $135,000 | 30c"; Medicare levy 2%.
Common questions
Is super payable on long service leave?
Yes on long service leave you take, and yes on long service leave you cash out while still employed: 12% of the amount paid. No on long service leave paid out when your employment ends.
Is superannuation payable on long service leave paid out on termination?
No. Section 6(1)(d) of the Superannuation Guarantee (Administration) Act removes a termination lump sum for unused long service leave from ordinary time earnings, and the ATO applies that whatever the reason the job ended and however the payout is taxed.
Is super paid if I cash out long service leave?
Yes, as long as you are still employed and your state or territory permits the cash-out. The ATO lists long service leave cashed out in service as qualifying earnings, so 12% applies to the cash-out amount. Where it is permitted is covered in can you cash out long service leave.
Is super paid on long service leave at half pay?
Yes. A half-pay amount is leave pay below your normal rate, which the ATO's draft ruling treats as your ordinary pay continuing, so your employer owes 12% of each half-pay amount it pays you.
Is super paid on portable long service leave?
Not when the scheme administrator pays it. The ATO lists long service leave paid by a portable scheme administrator as neither ordinary time earnings nor qualifying earnings.
Can I transfer my long service leave to my superannuation?
Not by rollover: the ATO does not allow a termination payment to be rolled into super, and a long service leave payout is not an ETP anyway. You can contribute part of the payout yourself and claim a deduction, within the $32,500 concessional cap, using the steps in the section above.
Is it better to take long service leave as a lump sum or as leave?
For super, taking the leave wins. Leave you take earns 12% super, $2,808.00 on Priya's 13 weeks at $1,800 a week, while a lump sum paid out when you leave earns none. If "lump sum" means being paid all your leave pay in one go when the leave starts, that is still leave pay and attracts the same 12%. A payout on leaving is also taxed under separate ATO rules, which the long service leave tax calculator applies.
How is long service leave paid out when you resign?
It depends on your state or territory and how many years you have worked. Pro-rata long service leave sets out the thresholds by state, and long service leave payout in NSW works through NSW by years and reason. Whatever the amount, it carries no super.
What are the new superannuation rules for 2026?
Payday Super began on 1 July 2026. The super guarantee is 12% of qualifying earnings, and the super on a regular pay has to land in your fund no later than 7 business days after you are paid.
When does my employer have to pay super on my long service leave?
For leave paid on your normal paydays, the super is due in your fund no later than 7 business days after each payday. Weekends are skipped, and so is any public holiday that applies across an entire state or territory.
What if my employer does not pay super on long service leave I took?
Give it 7 business days from the payday, then check your fund. Super on leave you take is owed under the super guarantee law, and section 116B of the Fair Work Act 2009 requires employers to make those contributions, so a shortfall is a Fair Work matter as well as an ATO one.
Fair Work Act 2009 s 116B, Compilation No. 73: "An employer must make contributions to a superannuation fund for the benefit of an employee so as to avoid liability to pay superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 in relation to the employee." Retrieved 9 September 2026.
Work out your entitlement or payout in weeks and dollars with the long service leave calculator, and the tax on a payout with the long service leave tax calculator. For leave you take, 12% of the leave pay is the super guarantee.
Superannuation Guarantee (Administration) Act 1992, Compilation No. 78 (in force 1 July 2026), ss 6(1), 10A(1), 17A. ATO, What payments are qualifying earnings, QC105843 (last updated 2 September 2026). ATO, LCR 2026/D1 Payday Super: qualifying earnings, draft, finalisation pending the appeal from [2026] FCA 898 (status checked 6 October 2026). ATO, Super guarantee, QC18123 (last updated 17 April 2026). ATO, Payment deadlines for Payday Super, QC105846 (last updated 29 September 2026). ATO, LCR 2026/1 (published 5 August 2026). Fair Work Act 2009 s 116B (Compilation No. 73). ATO, Employment termination payments for employees, QC27127 (last updated 5 June 2026). ATO, When a worker leaves your business, QC67964 (last updated 9 June 2026). ATO, Schedule 7, QC107125 (published 17 June 2026). ATO, resident tax rates 2026-27, QC73320. ATO, Contributions caps (last updated 11 September 2026). ATO, Personal super contributions (retrieved 6 October 2026). Long Service Leave Act 1955 (NSW), current version for 1 July 2025. Long Service Leave Act 1958 (WA), consolidation 04-m0-00. State and territory cash-out provisions as listed above, retrieved 30 September 2026.
Author & reviewer
Sarah has spent over a decade advising Australian SMBs on Fair Work, NES compliance, and payroll. Based in Sydney, she has worked across hospitality, retail and professional services.