Who must pay long service leave under the LSL Act 1955 (NSW)?
The applicability test for Pay long service leave under the LSL Act 1955 (NSW), computed across 35 industries, 9 business structures and 6 size bands.
Short answer: Some businesses
Applies when the business has employees.
What the obligation is
NSW employees accrue 2 months LSL after 10 years' continuous service, payable on resignation after 5 years.
The Long Service Leave Act 1955 (NSW) gives full-time, part-time and casual workers in NSW 8.67 weeks (2 months) of paid long service leave after 10 years' continuous service with the same employer, and a further 4.33 weeks (one month) for each additional 5 years. Between 5 and 10 years, a pro-rata payment is owed if the employer ends the employment for a reason other than serious misconduct, or the worker resigns because of illness, incapacity or domestic or other pressing necessity, or dies; after 10 years it is owed however employment ends. Leave cannot be cashed out, and it is an offence not to pay an entitlement when it falls due. Separate portable schemes cover building and construction, community services and contract cleaning workers, who accrue service across employers.
The applicability test
Applies when the business has employees.
How the regulator frames it: Every employer of full-time, part-time or casual workers in NSW, including employers of pieceworkers, commission workers and outworkers not covered by a federal award or enterprise agreement. Private sector workers whose federal award or enterprise agreement deals with long service leave, NSW public sector workers, Commonwealth government workers and local government workers under the Local Government State Award 2023 fall outside the Act.
What triggers it: A worker completing 10 years' continuous service, or employment ending after at least 5 years' service in one of the qualifying circumstances; a business sale that transfers workers to a new employer.
Jurisdiction: New South Wales law only. A business with no operations in NSW is outside it, whatever the rest of the test says.
Which industries are in or out
Outcome across the 35 industries Rules Mate maps (35 of 35: depends on size or structure).
The answer is the same in every industry: depends on size or structure. Industry does not change who must comply.
Business structure and size
Structure does not change the answer across all industries: for every structure the answer is "depends on size or structure".
| Size band | Answer across all industries, any structure |
|---|---|
| No employees (turnover $100K–$1M) | No |
| 1–5 employees (turnover $100K–$1M) | Yes |
| 6–19 employees (turnover $1M–$3M) | Yes |
| 20–99 employees (turnover $3M–$10M) | Yes |
| 100–499 employees (turnover $10M–$100M) | Yes |
| 500+ employees (turnover $100M–$1B) | Yes |
Worked examples
Each line is one run of the Rules Mate applicability engine for a single business profile, with the reason the engine gives:
- Pty Ltd company in real estate agents with 6–19 employees, turnover $1M–$3M: applies. You have employees (6–19)
- Pty Ltd company in real estate agents with no employees, turnover $100K–$1M: does not apply. Requires employees.
What you must do, and when
- When due
- Leave falls due at 10 years' service; the employer may direct when it is taken with at least 1 month's notice (shorter by agreement). Accrued and untaken leave must be paid immediately from the date employment ends.
- Frequency
- When a triggering event occurs
- Evidence to keep
- A Long Service Leave Record for each worker, kept throughout service and for at least 6 years after employment ends; records of absences and unpaid leave; payroll calculations of the ordinary-time rate used; on a business sale, the transferred records required by section 8 of the Act.
- Status
- Current
- Priority
- High
Penalty for not complying
Maximum penalty: Failing to pay long service leave when due, and giving or receiving payment instead of leave, are offences that can lead to court action and a criminal conviction; separate penalties apply for failing to keep the required records. Unpaid entitlements remain recoverable by the worker.
Audit or assurance level
Rules Mate has not yet classified the audit or assurance level for this obligation. Any audit, review or certification requirement is set by the regulator source listed below.
Obligations with the same applicability test
If this obligation applies to you, so do these 2: the engine uses the same rule for each.
Where it sits in the corpus
Rules Mate tracks 5 published obligations tagged "lsl", 0 of them rated critical. For a professional services Pty Ltd company with 6–19 employees operating in every state, 3 of those apply outright. This obligation is rated high priority, and is triggered by events.
Regulator, legislation and tools
Free tools that help with this obligation:
Questions
- Who must pay long service leave under the LSL Act 1955 (NSW)?
- Applies when the business has employees.
- Do sole traders need to pay long service leave under the LSL Act 1955 (NSW)?
- Depends on size or structure. Across every industry and every size band, the engine's answer for a sole trader is: depends on size or structure.
- Do businesses with 1–5 employees need to pay long service leave under the LSL Act 1955 (NSW)?
- Yes (1–5 employees, turnover $100K–$1M).
- When is "Pay long service leave under the LSL Act 1955 (NSW)" due?
- Leave falls due at 10 years' service; the employer may direct when it is taken with at least 1 month's notice (shorter by agreement). Accrued and untaken leave must be paid immediately from the date employment ends.
Related
Sources
Computed by the Rules Mate applicability engine from the published obligation corpus; facts last checked 3 October 2026. Rules Mate is not a law firm and this is general information, not legal advice. Confirm your position with the regulator source or a qualified adviser before acting.