Long Service Leave (LSL) is a longstanding entitlement for Australian employees. An employer must keep accurate records of the employee's long service leave for at least seven years after the employment ceases. Records must be kept in the form prescribed by the Department of Business and Innovation. Template for the approved Long Service Leave Record (PDF 22.88 KB) 
To quickly and easily find out how much LSL you need to give your employees or to find out how much LSL you are entitled to simply use our Long Service Leave Calculator.
Key information for understanding long service leave (LSL)
- Who does the LSL Act apply to?
- Length of time worked to be eligible for LSL
- How long service leave can be taken
- How payment for long service leave is calculated
- Termination of employment
- Effects of other types of leave on LSL
- Casual employment
- When a business is sold
- Cashing out LSL
- Phasing in arrangements explained
- Penalties for breaching the LSL Act
- Long service leave and your cash flow
Who does the LSL Act apply to?
Full time, part time, casual and seasonal employees all accrue long service leave.
However, the LSL Act does not apply to employees who are covered by a federal award or workplace agreement (individual or collective) where that award or agreement contains its own long service leave provisions.
The LSL Act also does not apply to employees who have their long service entitlement provided by another act or regulation, such as workers in building and construction, where it is provided by the CoINVEST scheme
Look at the Victorian Long Service Leave Act - comprehensive guide (PDF 1422.36 KB) for more details or call Fairwork on 13 13 94.
Length of time worked to be eligible for LSL
- An employee will be entitled to take long service leave after 10 years of continuous employment with one employer (see phasing in arrangement). The date of commencement of long service leave is to be agreed between the employee and the employer;
- An employee ceasing employment after at least seven years of continuous employment with one employer is entitled to be paid long service leave at the accrual rate of one week for each sixty weeks of continuous employment, regardless of the reason for termination of the employment.
See continuous employment page for more information and examples.
How long service leave can be taken
- The long service leave can be taken in separate periods so long as both parties agree;
- The first thirteen weeks of LSL may be taken in up to three separate periods and subsequent LSL may taken in two separate periods after 5 years of service;
- The actual date an employee's LSL commences should be agreed between the employer and employee.
See how long service leave can be taken page for more information and examples.
How payment for LSL is calculated
- The calculation of long service leave is the total number of weeks’ employment divided by 60 and multiplied by the ordinary weekly rate of pay at the time the leave is taken, or the employee ceases employment;
- Total weeks of service divided by 60, multiplied by ordinary weekly pay.
See calculating long service leave examples page for more information and examples.
Termination of employment
- On the day that employment ends an employee with at least seven years of continuous service with one employer is entitled to receive, in full, payment for any long service leave not taken;
- This will apply whether the employee has resigned, has had their employment terminated by the employer, has been made redundant, or has died, and regardless of the number of staff the business employs.
See termination of employment page for more information and examples.
The effects of other types of leave on LSL
- Any form of paid or unpaid parental leave (maternity, paternity or adoption leave), up to 52 weeks at a time, will not break continuous employment;
- An absence of any length from work on account of illness or injury (which includes a WorkCover absence), annual leave, or long service leave itself will not break employment;
- Any other form of paid or unpaid leave, for example study leave, will also not break employment.
See continuous employment page for more information and examples about the effect of other types of leave on LSL.
Casual employment
- Providing the employee has had continuous employment with one employer and there has been no longer than a three month absence between two periods of employment then LSL is accrued by the employee;
- Independent contractors and business owners are usually not employees and would not be eligible for long service leave provided by the LSL Act.
For more information about casual employment see varied hours from week to week example.
When a business is sold
- If a business is sold and the purchaser employs employees of the former owner, the new employer is responsible for their entire period of service with the business;
- To account for the value of the entitlement, sometimes a trust fund is established, or it may be factored into the sale price of the business;
- Irrespective of the arrangement, the new employer will be responsible for the employees service with the former owner and the current owner.
See one employer and long service leave for more information
Cashing out LSL
- Long service leave cannot be 'cashed out': it is an offence under the LSL Act to give or receive payment instead of the employee actually taking the break from work.
See how long service leave can be taken page for more information and examples about cashing out LSL.
The phasing in arrangement
Since 1 January 2006 the entitlement to take long service leave after 10 years service has been progressively phased in.
So, to calculate when an employee is eligible to take leave under the phasing arrangement:
- two thirds of an employee’s period of service before 1 January 2006; and
- all of an employee’s period of service from 1 January 2006 is taken into account.
When this amounts to a total of 10 years, the long service leave entitlement is due to be taken.
This phasing-in method does not reduce the amount of long service leave to which an employee is entitled once the 10 year service is calculated.
Phasing does not apply to termination of employment.
See the phasing in arrangement example for more information.
Penalties for breaching the LSL Act
Offences under the LSL Act attract a penalty of 20 penalty units.
The sole exception to this is the penalty for an offence relating to an employee working while on long service leave. This offence attracts a penalty of five penalty units for breach by an employee and/or an employer.
Where an employer or employee is found guilty of an offence, a criminal conviction may also be recorded.
See more information about penalties for breaching the LSL Act
Long service leave and your cash flow
Making sure your cash flow is in order is one of the most important steps in making a business successful. Make sure you factor staff long service leave into your cash flow forecasting so that you don't get caught short:
- use our long service leave calculator so you know how much leave your employees are entitled to for the forecast period;
- see how payment for LSL is calculated to find out the amount employees should be paid for leave during the forecast period.
- plan ahead and use our cash flow forecasting page and tools.
