Australian Capital Territory Long Service Leave Calculator

How ACT long service leave is calculated

Under the Long Service Leave Act 1976 (ACT), long service leave accrues at 0.8667 weeks for every year of continuous service with the same employer (or a business that was transferred to them). The first entitlement is 6.07 weeks after 7 years; after that, leave can be taken as it accrues. Weeks are converted to hours at your ordinary weekly hours and paid at your ordinary weekly pay, without overtime.

Worked example: Alex started on 1 July 2016, works 38 hours a week and earns $1,500 a week. On 1 July 2021, after 5 years, Alex has accrued 4.33 weeks. Resigning for a new job then pays nothing; being made redundant pays 4.33 weeks ($6,500). After 12 years Alex has 10.40 weeks (395.2 hours), of which 10.40 weeks can be taken while still employed, and resigning pays $15,600.

When ACT long service leave is paid out

What happens to 5 years of service (4.33 weeks accrued) depending on why the job ends. Before 5 years nothing is paid; after 7 years accrued leave is paid on any termination.

What makes ACT long service leave different

The ACT works like Victoria: leave accrues at a fifth of a month (0.87 weeks) for every year and can be taken after 7 years, when about 6.07 weeks has built up. After 7 years, untaken leave is paid when you leave for any reason, within 90 days. The ACT is also the only jurisdiction that pays pro rata from 5 years on specified grounds: resigning because of illness, incapacity or a domestic or other pressing necessity, resigning at or after the minimum retiring age, death, or termination by the employer other than for serious and wilful misconduct.

There is no cashing out in the ACT, and the Act cannot be contracted out of. Part-time and casual employees are paid on their average weekly hours over the 12 months before the leave; anyone who moved from full-time to part-time or casual in the 2 years before becoming entitled is paid their 5-year average pay. Each public holiday during the leave adds a day, and once 4 weeks has accrued the employer must grant leave as soon as practicable with 60 days' notice.

Tax on a ACT long service leave payout

Long service leave taken while employed is taxed like normal pay. Unused leave paid when you leave is taxed under the ATO's Schedule 7 rules, which are the same in every state: leave accrued after 17 August 1993 is taxed at your marginal rates on a normal resignation or dismissal, and withheld at 32% after a genuine redundancy, invalidity or approved early retirement; leave accrued between 16 August 1978 and 17 August 1993 is withheld at 32%; and only 5% of leave accrued before 16 August 1978 is taxed.

On a $78,000 salary, Alex's $15,600 payout after 12 years adds about $4,992 of tax and Medicare at a 32% marginal rate, leaving $10,608. Unused long service leave paid on termination is not ordinary time earnings, so no super guarantee is paid on it.