Annual Leave vs Long Service Leave: Key Differences Explained

Published: January 2026 | Reading time: 10 minutes

Australian employees enjoy access to multiple types of paid leave, with annual leave and long service leave being two of the most valuable entitlements. While both provide paid time away from work, they serve different purposes, accrue at different rates, and are governed by different rules. Understanding these differences helps you make informed decisions about using your leave entitlements and planning for the future.

This comprehensive guide explores how annual leave and long service leave compare across all the key dimensions, from eligibility requirements to how each is calculated and when it can be accessed. Whether you're approaching long service leave eligibility or simply want to understand your full entitlements picture, this article provides the clarity you need.

Fundamental Differences in Purpose and Origin

Annual leave and long service leave exist for distinctly different reasons, reflecting their different historical origins. Annual leave is a standard employment entitlement designed to provide regular rest and recreation throughout your working life. It recognizes that employees need periodic breaks from work to maintain their health, wellbeing, and productivity. The entitlement applies from your first day of permanent employment and is available for use as it accrues.

Long service leave, by contrast, rewards extended loyalty to a single employer. Its origins trace back to colonial Australia when the entitlement allowed workers to take extended periods to visit family in Britain. Today, it serves as recognition of long-term commitment to an organization, providing a substantial block of leave after years of service. The entitlement only becomes accessible after you've worked for the same employer for an extended qualifying period.

This fundamental difference in purpose shapes how each type of leave is structured, calculated, and accessed. Annual leave supports ongoing work-life balance, while long service leave provides a once-in-several-years opportunity for extended time off, career reflection, or significant life activities that shorter breaks don't accommodate.

Eligibility Requirements and Qualifying Periods

The eligibility requirements for these two leave types differ dramatically. Annual leave is available to all permanent employees, both full-time and part-time, from the first day of employment. There is no waiting period to begin accruing annual leave. You start accumulating this entitlement immediately upon commencing permanent work, and you can typically access it as soon as you've accrued sufficient balance, subject to employer approval.

Long service leave requires substantially longer commitment before becoming accessible. In most Australian states and territories, you must complete between seven and ten years of continuous service with the same employer to access long service leave. The exact qualifying period varies by state and territory. In New South Wales, Victoria, and Queensland, the standard qualifying period is ten years. In some other jurisdictions or under specific awards, you may be eligible after seven years.

Additionally, if your employment ends after a certain period but before reaching the full qualifying threshold, you may still receive a pro-rata long service leave payout. These provisions typically apply after five to seven years of service, depending on your jurisdiction and the circumstances of your departure. This partial entitlement recognizes your years of service even if you don't reach the full qualifying period.

Accrual Rates and Calculations

The accrual rates for annual leave and long service leave reflect their different purposes and timelines. Annual leave accrues at four weeks per year for full-time employees under the National Employment Standards, with some shift workers entitled to five weeks. This equates to approximately 2.923 hours per week for a standard 38-hour week employee. Use our annual leave calculator to determine your exact current balance based on your employment details.

Long service leave accrues much more slowly but accumulates to a larger total. The standard entitlement across most jurisdictions is approximately 8.67 weeks of leave after ten years of service, which works out to roughly 0.867 weeks per year of service or about 0.65 hours per week for full-time employees. Some states and specific industries offer more generous provisions.

Part-time employees accrue both types of leave on a pro-rata basis according to their ordinary hours. However, the calculation methods may differ slightly between leave types and jurisdictions. For long service leave, periods of part-time work during your qualifying period may be calculated at the rate that applied during those years, which can result in complex calculations if your hours have varied over a decade of employment.

Taking Leave and Payment Rates

How you take each type of leave and how you're paid during it also differs between annual leave and long service leave. Annual leave is typically taken in shorter periods throughout the year, from single days to a few consecutive weeks. Employers cannot unreasonably refuse annual leave requests, though they may negotiate timing to suit business needs. Payment during annual leave is at your ordinary rate of pay, with some awards also providing leave loading.

Long service leave is often taken in larger blocks, reflecting its purpose of providing substantial time away from work. Some employers and awards allow long service leave to be taken at half-pay over a double period (for example, 17 weeks at half-pay instead of 8.5 weeks at full pay), which can be attractive for employees wanting an extended break. The decision to take leave at half-pay usually requires agreement from both parties.

Some jurisdictions and awards also allow long service leave to be taken in smaller increments rather than all at once, though this varies by state legislation and employer policies. This flexibility can be useful if you want to preserve some long service leave for future use while taking a portion now.

Impact of Job Changes and Termination

What happens to each leave type when you change jobs or your employment ends is another key difference. Accrued annual leave is always paid out when employment ends, regardless of the reason for termination. Whether you resign, are made redundant, or are terminated, your employer must pay you for all accrued but untaken annual leave in your final pay.

Long service leave treatment upon termination is more complex and depends on your length of service and the circumstances of your departure. If you've completed the full qualifying period, any accrued long service leave must be paid out. If you've completed the pro-rata threshold but not the full qualifying period, your entitlement to a payout may depend on how your employment ended and your jurisdiction's specific rules.

Importantly, long service leave does not transfer between employers. If you leave one employer to join another, you lose any accrued long service leave progress unless specific portable long service leave schemes apply in your industry (such as construction or community services in some states). Your long service leave clock starts again from zero with your new employer. Annual leave, while also not transferring, accumulates quickly enough that this reset is less significant.

Strategic Considerations for Using Both Leave Types

Understanding the differences between these leave types helps you develop a strategic approach to using your entitlements. Many employees find it valuable to use annual leave regularly throughout the year for standard holidays and breaks, while preserving long service leave for significant life events or extended travel that shorter breaks don't accommodate.

Some employees approaching retirement age choose to use their long service leave toward the end of their career, providing a substantial period of paid time off before formally retiring. Others prefer to take their long service leave mid-career, using the extended break for study, extended travel, or family time before returning to work refreshed.

Consider how your leave decisions interact with your financial planning, career goals, and personal circumstances. Both types of leave represent significant financial entitlements that should be factored into decisions about job changes, retirement timing, and major life events.

Conclusion

Annual leave and long service leave are both valuable entitlements, but they serve different purposes and operate under different rules. Annual leave provides regular, ongoing rest and recreation, available throughout your employment. Long service leave rewards extended commitment to a single employer, offering substantial time off after years of service.

Understanding how both types of leave work helps you maximize your entitlements and plan effectively for both short-term breaks and longer-term career and life decisions. Keep track of your annual leave balance using our free calculator and stay informed about your progress toward long service leave eligibility. Together, these entitlements represent a significant benefit of Australian employment that supports your wellbeing across your entire career.