In most industries, long service leave accrues with a single employer and is lost if the worker moves on before qualifying. In a handful of industries, construction, cleaning, and community services chief among them, it works differently: long service leave is portable, travelling with the worker between employers within the industry, administered by a dedicated industry fund and funded by employer levies rather than accrued on each employer’s own books. If you employ workers in a covered industry, you almost certainly have registration and levy obligations to a portable LSL scheme, and getting them wrong is a compliance gap that compounds quietly. A construction employer with $2.4 million of covered wages paying a levy of roughly 1% to 2% (scheme rates vary by state and industry) can be looking at $24,000 to $48,000 a year in levies alone. Missing five years of registration is not a small paperwork miss. This guide explains how portable schemes work, which industries have them, worked levy maths, and what employers must do. It is general information only. Scheme rules are state and industry specific, so confirm your obligations with the relevant authority.
Published: July 2026
Ordinary long service leave rewards long service with one employer, which works where employment is stable but fails entire industries where it is not. In construction, cleaning and community services, workers characteristically move between employers frequently, following projects, contracts and funding, so under the ordinary rules they would almost never accrue enough continuous service with one employer to qualify for long service leave, despite spending a full career in the industry. Portable schemes fix that mismatch by attaching the entitlement to the worker’s service in the industry rather than with a single employer. The worker builds up long service leave across all their employers in the covered industry, and can claim it based on total industry service, funded collectively by employers through levies to a central fund.
This is a distinctly different mechanism from ordinary long service leave, covered in leave entitlements by state 2026 and related leave liability tools such as the annual leave liability estimator. Ordinary LSL is an employer-by-employer entitlement accrued on the employer’s own books. Portable LSL is an industry-wide entitlement administered by a fund and paid for by levies. An employer in a covered industry must not treat portable LSL as if it were the ordinary kind.
Portable long service leave schemes operate on a state-and-territory basis, and the covered industries commonly include:
Because these schemes are established under state and territory legislation, the exact industries covered, the definitions, and the scheme rules differ by jurisdiction, so an employer operating in more than one state may deal with more than one scheme even within the same industry, and an employer in a borderline activity must check whether it is captured. The key action is to determine, for each state you operate in, whether your industry and workers are covered.
Where a portable scheme covers your workers, the obligations typically include:
The entitlement itself is then claimed by the worker from the fund (or administered through it) based on their total industry service, rather than being paid directly by whichever employer happens to employ them at the qualifying moment, which is the whole point: no single employer bears the full cost, and the worker does not lose the entitlement by moving.
A NSW contract cleaning business has $1.1 million of covered wages. At an illustrative levy rate of 1.7%, the annual levy is about $18,700. Quarterly reporting means about $4,675 per quarter plus the admin of worker schedules. Missing two years of registration can create roughly $37,400 of back-levies before penalties and interest. That is why registration is not optional once coverage is clear.
A builder operates in Queensland and Victoria with $900,000 covered wages in each state. Two schemes, two registrations, two reporting cycles, two levy rates. Combined levies might sit around $25,000 to $40,000 a year depending on rates. Multi-state employers need a compliance calendar, not a single national assumption. Related multi-state people compliance sits in multi-state workforce compliance checklist Australia.
The characteristic portable LSL failure is not deliberate. It is an employer that never registered because it did not realise its activity was covered, then accumulates an unregistered position and unpaid levies over years. Because the scheme is separate from the ordinary payroll and tax obligations an employer is used to, it is easy to miss entirely, especially for a business that has grown into a covered activity or operates across a border into a jurisdiction with different coverage. When the gap surfaces, on an audit, a worker query, or a review, the employer faces back-levies and potential penalties for the unregistered period.
The second trap is the reverse: an employer that correctly accrues ordinary LSL on its books and is in a portable scheme, effectively provisioning twice or being confused about which entitlement applies. In a covered industry, the portable scheme generally takes the place of the ordinary LSL accrual for covered workers, so understanding which mechanism applies to which workers prevents both under- and over-provisioning. For ordinary leave cost thinking see how much does annual leave actually cost your Australian business.
Portable long service leave is a genuine, separate obligation that an employer in construction, cleaning or community services needs to identify, register for, report to, and pay levies on, correctly and on time, in each state it operates. The practical steps are to determine coverage for each state and industry in which you employ workers, register and report as the scheme requires, calculate and pay the levy accurately, keep the supporting records, and make sure the business is not also accruing ordinary LSL for the same covered workers. This is standing compliance and payroll work, sitting alongside the ordinary payroll obligations but running on a separate track, and it is exactly the kind of easily-missed, industry-specific requirement an embedded finance and HR function is well placed to catch and manage. Because the schemes are state and industry specific and the coverage rules can be intricate, an employer’s specific obligations should be confirmed with the relevant portable LSL authority or an adviser.
What is portable long service leave?
A long service leave entitlement that travels with a worker between employers within a covered industry, administered by an industry fund and funded by employer levies, rather than accruing with a single employer. The worker builds the entitlement across all their industry employers and claims it based on total industry service.
How is portable LSL different from ordinary long service leave?
Ordinary LSL is an employer-by-employer entitlement accrued on the employer’s own books and generally lost if the worker leaves before qualifying. Portable LSL is an industry-wide entitlement administered by a central fund and paid for by employer levies, so the worker keeps building it as they move between employers in the industry.
Which industries have portable LSL schemes?
Commonly building and construction (the longest-established), contract cleaning, and community services, though coverage is set by state and territory legislation and differs by jurisdiction. An employer should check, for each state it operates in, whether its industry and workers are covered.
What must an employer in a covered industry do?
Register with the relevant portable LSL authority and register its covered workers, report workers and service or wage information periodically (often quarterly), pay the levy (generally a percentage of covered workers’ wages), and keep supporting records. The entitlement is then claimed by the worker from the fund based on total industry service.
What is the levy and who pays it?
A charge the employer pays to the portable LSL fund, generally calculated as a percentage of covered workers’ wages at a rate set by the scheme. It funds the entitlement collectively across all employers in the industry, in place of the employer accruing LSL on its own books.
What is the most common portable LSL mistake?
Never registering because the employer did not realise its activity was covered, then accumulating an unregistered position and unpaid levies over years. When it surfaces on an audit or worker query, the employer faces back-levies and potential penalties. Employers growing into or across into covered activities are most at risk.
Do I accrue ordinary LSL as well as pay the portable levy?
Generally not for the same covered workers. In a covered industry the portable scheme takes the place of the ordinary LSL accrual for those workers. Provisioning ordinary LSL and paying portable levies for the same workers means double-counting, so understanding which mechanism applies to which workers matters.
Are office staff in a construction company covered?
Coverage turns on scheme definitions of covered work and covered workers, which can include some non-site roles depending on the jurisdiction and activity. Do not assume only on-site trades are caught. Check the scheme rules for your state.
Can levies be passed on to clients?
Commercially, some contractors price levies into job costs. That is a pricing decision, not a substitute for registration and payment. The employer still owes the scheme.
Is this advice?
No. This is general information. Portable LSL schemes are state and industry specific with intricate coverage rules, so an employer’s specific registration, reporting and levy obligations should be confirmed with the relevant portable LSL authority or a qualified adviser.
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We review and check this guide periodically. At the time of writing (July 2026), all information was current. Scale Suite is a registered BAS Agent, not a licensed tax advisor or financial advisor. This content is general information only and does not constitute professional tax, financial, or legal advice. Some details may change over time.
Scale Suite is a Sydney-based provider of outsourced finance and HR services for Australian SMEs. We deliver bookkeeping, financial reporting, payroll processing, fractional CFO support, recruitment, employee onboarding, people and culture support, and fractional HR oversight, all as a fully embedded team that works inside your business.
Employment Hero Gold Partner, CA-qualified, and Xero Certified, we replace fragmented finance and HR processes with one responsive, senior-level function at a fraction of the cost of full-time hires. We serve growing businesses across Sydney, Melbourne, Brisbane, and Perth, with packages starting from $1,500 per month and no lock-in contracts.
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