NSW Long Service Leave.

How long service leave works in New South Wales

Long service leave in New South Wales accrues under the Long Service Leave Act 1955. You reach the full entitlement at 10 years of continuous service with one employer, and from that point a further 4.33 weeks accrues for each additional 5 years of service.

The full entitlement is 8.67 weeks (2 months) at 10 years, plus 4.33 weeks for each further 5 years. Long service leave sits outside the National Employment Standards, so this is set by New South Wales law rather than federal law, and the figures differ from every other state. Compare all eight in our guide to long service leave after 10 years.

Leaving before 10 years: pro-rata in NSW

Pro-rata long service leave becomes possible at 5 years of continuous service in New South Wales. That threshold is necessary, but in this state it is not sufficient.

This is the single most misunderstood part of long service leave, and it is where people lose the most money. The threshold is what gets quoted in conversation; the condition is what decides whether anything is actually paid. Our pro-rata long service leave guide sets out the rule for all eight states and territories side by side.

What counts as continuous service

Service must be continuous with the one employer, though NSW is reasonably generous about what does not break it. Paid leave of any kind counts. Authorised unpaid leave and periods of illness generally pause the clock without breaking continuity. A transfer of business normally carries service across to the new employer, and a strike or stand-down does not break service.

How the payment is calculated

The payment is based on your ordinary gross weekly wage at the time the leave is taken or paid out, excluding overtime. Where your pay has varied, NSW uses the average of the last 5 years or the last 12 months, whichever is higher, which usually favours the worker after a pay rise.

How the payout is taxed

The entitlement is set by New South Wales law, but the tax on it is federal and works differently to almost every other payment. The ATO splits a long service leave payout by when the service was performed, not just why you left, and taxes each slice under the rules that applied at the time. Service from 18 August 1993 is taxed at your marginal rate on an ordinary resignation, or capped at 30% plus the Medicare levy on a genuine redundancy. Earlier service is treated more favourably again.

This is why a flat 32% estimate is usually wrong: that figure is a ceiling plus the Medicare levy, not a fixed rate, so anyone below the 30% bracket pays less. Work out the split on your own payout with the long service leave tax calculator.

An NSW worked example

Does other leave keep accruing while you are on it?

Yes. Long service leave is paid leave, and paid leave counts as service in every Australian jurisdiction. That means annual leave and personal leave continue to accrue for the whole time you are away, and the period also counts towards your next long service leave milestone. A worker taking 8.67 weeks in NSW comes back with roughly a week of extra annual leave already banked.

A public holiday falling inside a period of long service leave is treated the same way it is inside annual leave: you are not taken to be on leave that day, so it does not come out of your balance. The NSW dates are listed on NSW public holidays. If you fall ill during long service leave, most states let you convert the affected days to personal leave with evidence, which preserves the long service balance.

Long service leave in your final pay

When employment ends, any long service leave you are entitled to is paid as part of your final pay rather than separately. It sits alongside unused annual leave, outstanding wages, and notice or redundancy where they apply. Work the whole amount out on the final pay calculator, or see termination pay for how the components fit together.

Two things change the number. Superannuation is generally not payable on a long service leave payout, because the ATO does not treat it as ordinary time earnings, and the withholding rate depends on why the employment ended. A payout tied to a genuine redundancy is taxed concessionally, while an ordinary resignation is taxed at your marginal rate. Neither changes the gross figure the calculator produces above; both change what lands in your account.

The NSW catch worth knowing

New South Wales has the lowest pro-rata threshold in the country at 5 years, tied with the ACT. That sounds generous and often is not, because the conditions attached below 10 years are strict. The threshold is what gets quoted; the condition is what decides whether you are paid.

Construction workers: your service may be portable

If you work in building and construction, the continuous-service rule above may not be the one that applies to you. New South Wales runs a portable long service leave scheme where service accrues with the industry rather than a single employer, so moving between builders does not reset the clock. See portable long service leave and our NSW portable scheme guide. You cannot be paid twice for the same period of service.

Where to check your own entitlement

New South Wales long service leave is administered by NSW Industrial Relations, which is the authority of record for disputes and for any figure you intend to rely on. The calculator above estimates your balance under the Long Service Leave Act 1955 (NSW); where a number decides whether you resign or wait, confirm it with the authority or the Fair Work Ombudsman first.