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Annual Leave & Long Service Leave Entitlements Guide Australia (2026–27)

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Annual Leave & Long Service Leave Entitlements Guide (2026–27)

Taking time off work without sacrificing your income is a foundational workplace right in Australia. Governed by the National Employment Standards (NES) and Modern Awards under the Fair Work Act 2009, Australian employees are protected by robust leave entitlements designed to prevent burnout and reward long-term loyalty.

Whether you are a full-time professional, part-time shift worker, or employer calculating final pay provisions, this comprehensive guide covers everything you need to know about annual leave accruals, leave loading, and state-by-state Long Service Leave (LSL) legislation.

1. Annual Leave: The Basics Under National Employment Standards

Under the NES, all full-time and part-time Australian employees accrue paid annual leave progressively throughout the working year based on their ordinary hours of work.

How Much Annual Leave Do You Get?

  • Standard Full-Time Employees: 4 weeks (20 working days / 152 hours) of paid annual leave for each year of continuous service.
  • Continuous Shift Workers: 5 weeks (25 working days / 190 hours) if you regularly work Sundays and public holidays in an industry where shifts run 24/7.
  • Part-Time Employees: Accrue annual leave on a pro-rata basis according to their agreed weekly ordinary hours.
  • Casual Employees: Do not accrue paid annual leave; instead, they receive a 25% casual loading in lieu of paid leave entitlements.

The Accrual Formula

Annual leave accumulates progressively from the first day of employment and rolls over year to year if unused:

Weekly Accrual (Full-Time)=152 hours52 weeks≈2.923 hours per week\text{Weekly Accrual (Full-Time)} = \frac{152 \text{ hours}}{52 \text{ weeks}} \approx 2.923 \text{ hours per week}

For part-time workers, the calculation is:

Annual Leave Accrual=Ordinary Hours Worked×7.6923%\text{Annual Leave Accrual} = \text{Ordinary Hours Worked} \times 7.6923\%

2. Annual Leave Loading Explained (17.5%)

Many Australian workers covered by Modern Awards or Enterprise Agreements (EBAs) receive Annual Leave Loading—typically an extra 17.5% added to their base pay while on holiday.

Why Does Leave Loading Exist?

Leave loading was introduced in the 1970s to compensate employees for the loss of overtime, shift allowances, or weekend penalty rates they would have earned had they remained at work rather than taking annual leave.

Leave Loading Example

Suppose your ordinary base wage is $1,600 per 40-hour week ($40.00/hr) and your Modern Award specifies a 17.5% leave loading:

  • Ordinary Holiday Pay (2 Weeks): $1,600 \times 2 = $3,200
  • 17.5% Leave Loading: $3,200 \times 17.5% = $560
  • Total Gross Holiday Pay: $3,760

3. Long Service Leave (LSL) by State & Territory

Long Service Leave (LSL) is a uniquely Australian statutory entitlement rewarding long, continuous service with a single employer. Unlike annual leave, which is governed at the federal level, LSL is administered under state and territory legislation.

State / TerritoryQualifying PeriodEntitlement at MilestonePro-Rata Payment on Resignation / Redundancy
New South Wales (NSW)10 years2 months (8.67 weeks)After 5 years (subject to genuine illness/redundancy)
Victoria (VIC)7 years~6.1 weeks (1 week per 60 weeks service)After 7 years (can take leave or cash out upon termination)
Queensland (QLD)10 years8.67 weeksAfter 7 years (under qualifying termination grounds)
Western Australia (WA)10 years8.67 weeksAfter 7 years
South Australia (SA)10 years13 weeksAfter 7 years
Tasmania (TAS)10 years8.67 weeksAfter 7 years
ACT7 years~6.06 weeksAfter 5 years
Northern Territory (NT)10 years13 weeksAfter 7 years

4. What Happens to Accrued Leave When You Resign?

When your employment ends—whether by voluntary resignation, redundancy, or dismissal—your employer must pay out all accrued, untaken annual leave and eligible pro-rata long service leave in your final pay.

  • Annual Leave Payout: Must include leave loading if it would have been paid had you taken the leave during employment.
  • Superannuation on Leave Payout: Super Guarantee (11.5%–12%) is generally not payable on lump-sum accrued annual leave or LSL paid out on termination.
  • Taxation of Leave Payouts: Lump-sum leave payments on termination are taxed under special ATO marginal withholding rules depending on whether termination was due to genuine redundancy or normal resignation.

5. Calculate Your Exact Leave Entitlements

Track your accumulated leave hours, calculate holiday pay with loading, or model your final payout using our free Australian workplace tools:

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