You have decided to resign. You have eight years with your employer, and you have heard that long service leave might be paid out when you leave. Then a colleague says you get nothing until ten years, and someone else says you get a pro-rata payment after seven. Who is right? In Australia, the answer depends almost entirely on which state or territory you work in — and on how many years you have served.
Long service leave (LSL) is not a national entitlement like annual leave. It is governed by state and territory law, not by the National Employment Standards (NES), which preserves existing state rights but creates no single national rule. That is why two employees with identical service can walk away with very different payouts simply because one works in Melbourne and the other in Sydney. This guide compares the rules state by state, with a worked example, tax notes, and what to do if your employer refuses to pay. It is general information only, not legal advice. To estimate your entitlement, try the long service leave calculator.
Why Long Service Leave Is Different From Annual Leave
Annual leave accrues from your first day and is paid out on termination whether you resign, are dismissed or are made redundant. Long service leave rewards long, continuous service with a single employer, and in most states you must reach a qualifying period — often seven or ten years — before any entitlement arises at all. Before that period, you generally have no long service leave to be paid out, even if you have served for several years.
After the qualifying period, treatment on resignation depends on your state: some pay pro-rata beyond the threshold, some pay only on particular grounds. Your award or agreement may beat the state minimum, and the better entitlement generally applies.
State-by-State Rules at a Glance
| State / Territory | Full entitlement | Qualifying period | Pro-rata on resignation |
|---|---|---|---|
| New South Wales (NSW) | 8.6667 weeks (2 months) | 10 years | After 5 years ONLY on specified grounds — illness, incapacity, domestic or other pressing necessity, or dismissal other than for serious and wilful misconduct. A plain resignation before 10 years gets nothing. |
| Victoria (VIC) | 8.6667 weeks over 10 years (1/60th of service) | 7 years | Yes — pro-rata on any termination after 7 years, regardless of reason, including resignation. |
| Queensland (QLD) | 8.6667 weeks (2 months) | 10 years | Yes — pro-rata after 7 years on termination for reasons other than serious misconduct. |
| Western Australia (WA) | 8.6667 weeks | 10 years | Yes — pro-rata after 7 years, except where terminated for serious misconduct. |
| South Australia (SA) | 13 weeks | 10 years | Yes — pro-rata after 7 years. |
| Northern Territory (NT) | 13 weeks | 10 years | Yes — pro-rata after 7 years. |
| Tasmania (TAS) | 13 weeks | 15 years | Yes — pro-rata after 10 years on termination other than for serious misconduct. Check the current Act, as Tasmanian rules have specific conditions. |
| Australian Capital Territory (ACT) | 6.0667 weeks | 7 years | Yes — pro-rata after 5 years in special circumstances. |
Note the headline trap: SA, NT and TAS offer 13 weeks, more than the 8.6667 weeks elsewhere, but TAS requires 15 years for the full entitlement. The ACT’s entitlement arises earliest, at seven years, but is smaller at 6.0667 weeks.
New South Wales: The Strictest Resignation Rule
New South Wales is the state most likely to disappoint a resigning employee. The standard entitlement is 8.6667 weeks (two months) after 10 years of continuous service. If you resign plainly — for a better job, a change, or a move interstate — before completing 10 years, you get no pro-rata payout, even with eight or nine years of service.
Pro-rata after five years is available only on specified grounds: resignation because of illness, incapacity, or domestic or other pressing necessity, or dismissal other than for serious and wilful misconduct. A voluntary resignation for ordinary career reasons does not qualify. Timing is therefore critical: at nine years and six months, resigning for a new job pays nothing, while staying six more months to complete ten years earns the full 8.6667 weeks.
Victoria: The Most Generous Resignation Rule
Victoria is the most favourable state for a resigning employee. Leave accrues at 1/60th of continuous employment — about 0.8667 weeks per year, building to 8.6667 weeks over ten years — with entitlement to take leave after seven years.
Crucially, once you have completed seven years, you are entitled to a pro-rata payout on any termination, regardless of reason. A Victorian employee with eight years who resigns is therefore entitled to pro-rata payment, while a New South Wales employee in the same position is entitled to nothing.
Queensland and Western Australia: Pro-Rata After Seven Years
Queensland and Western Australia sit between New South Wales and Victoria. In both, the full entitlement is 8.6667 weeks after ten years, with pro-rata after seven years subject to a misconduct exception: Queensland pays pro-rata on termination for reasons other than serious misconduct, and Western Australia pays except where terminated for serious misconduct. An ordinary resignation after seven years qualifies in both — unlike New South Wales, where it pays nothing.
South Australia, Northern Territory, Tasmania and the ACT
South Australia and the Northern Territory each provide 13 weeks after ten years, with pro-rata payment after seven years — substantially more than the 8.6667 weeks in the eastern mainland states.
Tasmania also provides 13 weeks, but only after 15 years — the longest qualifying period in the country — with pro-rata after ten years on termination other than for serious misconduct. Check the current Act carefully, as Tasmanian rules have specific conditions. The ACT is the outlier at the other end: 6.0667 weeks after seven years, with pro-rata after five years in special circumstances.
Worked Example: 8 Years’ Service in Victoria vs New South Wales
Take two employees, both earning the same ordinary pay, both with exactly eight years of continuous service, both resigning voluntarily for a new job. In Victoria, long service leave accrues at about 0.8667 weeks per year. After eight years, the pro-rata entitlement is approximately 8 × 0.8667 = 6.93 weeks. That employee walks away with about 6.93 weeks at their ordinary rate of pay.
In New South Wales, the same employee receives nil: ten years has not been reached, and a plain resignation is not a specified ground for pro-rata payment after five years. In dollars, the Victorian payout is approximately $10,395 before tax at $1,500 per week, or $13,860 at $2,000 per week; the New South Wales figure is $0. Employees weighing a move can use the long service leave calculator alongside a salary comparison to see how timing affects the total package.
How Is a Payout Calculated, and How Is It Taxed?
A payout on termination is generally paid at your ordinary rate of pay at termination. State rules vary on whether allowances or loadings are included — usually it is your ordinary pay rate, so check your state Act and your award or agreement. Your final payslip should itemise annual leave and long service leave separately.
For tax, unused long service leave paid on termination is taxed as income in the year it is received. It is NOT an employment termination payment (ETP), and ETP tax rates do not apply. Your employer will withhold tax as part of your final pay, and the amount is included in your assessable income for that year. A payout in June versus July falls in different financial years, so timing can matter. Superannuation guarantee is generally not payable on unused long service leave paid on termination, although your award, agreement or contract may say otherwise.
What to Do If Your Employer Refuses to Pay
If your employer refuses or omits a pro-rata payout from your final pay, proceed methodically. First, check your award or agreement: it may beat the state Act, and the better entitlement generally applies. Second, confirm your service record — start date and any breaks — since service-date errors commonly cause disputes. Third, put your claim in writing, setting out your service period, the clause you rely on, and the amount you calculate.
Fourth, contact the Fair Work Ombudsman or the relevant state body, which can often resolve underpayments without court proceedings. Finally, get advice promptly: time limits vary by state. Keep copies of your contract, payslips, leave records and resignation letter.
Before You Resign: A Short Checklist
Confirm which state law applies, your exact continuous service anniversary and how close you are to the next threshold (5, 7, 10 or 15 years), and whether your award or agreement beats the state minimum. Estimate your payout with the long service leave calculator before you give notice. In New South Wales especially, a few months can mean the difference between nothing and 8.6667 weeks.
Frequently Asked Questions
Do I get long service leave if I resign before 10 years?
It depends on your state. In Victoria, yes — pro-rata on any termination after 7 years. In Queensland, Western Australia, South Australia and the Northern Territory, yes — pro-rata after 7 years, subject to the serious misconduct exception in some states. In New South Wales, a plain resignation before 10 years gets nothing. In Tasmania, pro-rata is available after 10 years; in the ACT, after 5 years in special circumstances.
Is long service leave a national entitlement under the NES?
No. It is state and territory law. The NES preserves existing state and territory rights but does not create a single national entitlement, which is why the rules differ so much.
How much long service leave do I get after 10 years?
It depends on your state: 8.6667 weeks in New South Wales, Queensland and Western Australia; 13 weeks in South Australia, the Northern Territory and Tasmania (though Tasmania’s full 13 weeks requires 15 years); in Victoria, 8.6667 weeks accrued over 10 years, with entitlement to take leave after 7 years. The ACT provides 6.0667 weeks after 7 years.
Is a long service leave payout taxed as an employment termination payment?
No. Unused long service leave paid on termination is taxed as income in the year received. It is not an employment termination payment, and ETP tax rates do not apply.
Does my award or agreement override the state law?
Your award or agreement can provide a better entitlement than the state minimum, and the better entitlement generally applies. Always check your instrument as well as the state Act.
What should I do if my employer refuses to pay?
Check your award or agreement, confirm your service record, put your claim in writing with the clause you rely on, then contact the Fair Work Ombudsman or the relevant state long service leave body. Act promptly, as time limits apply.
Conclusion: Know Your State Before You Hand In Your Notice
Long service leave on resignation is one of the few employment decisions where geography matters as much as tenure. Eight years of service can mean about 6.93 weeks of pay in Victoria and nothing at all in New South Wales on a plain resignation. Seven years opens a pro-rata door in Queensland, Western Australia, South Australia and the Northern Territory, while Tasmania’s full entitlement waits until fifteen years and the ACT’s arrives at seven with a smaller figure.
Before you resign, find your state rule, check your instrument, confirm your service anniversary, and estimate your payout. This guide is general information only, not legal advice — if your service history is complex or your employer disputes your claim, get advice early and in writing.