What NSW Portable Long Service Leave Means for Not-for-Profit Employers (and When Your First Payment Is Due)

The introduction of Portable Long Service Leave (PLSL) in NSW is one of the biggest workforce changes the community services sector has seen in years.

For not-for-profit employers—already balancing tight funding, compliance, and workforce challenges—this reform brings both opportunity and added responsibility.

Here’s what you need to know.

What is Portable Long Service Leave?

From 1 July 2025, the NSW Government introduced the Community Services Industry Portable Long Service Leave Scheme.

Unlike traditional long service leave (which is tied to one employer), this scheme allows workers to:

• Accrue leave across multiple employers
• Stay within the community services sector
• Still build toward long service entitlements

This is especially important in the NFP sector, where staff often move between organisations but remain committed to the same purpose-driven work.

Workers can typically access:

• Up to 6 weeks of paid leave after 7 years of service

Why This Matters for Not-for-Profits

The scheme was designed with sectors like yours in mind.

Community services often involve:

• Short-term contracts
• Funding-driven workforce changes
• High mobility between organisations

Historically, this meant many employees missed out on long service leave altogether—despite years in the industry.

Now, the system recognises industry loyalty—not just employer loyalty.

What Employers Need to Do

If you’re a not-for-profit delivering community services in NSW, you are likely required to:

• Register with the Long Service Corporation
• Submit quarterly service returns
• Pay a levy (approx. 1.7% of wages) to fund future leave

This levy replaces the need to fully carry long service leave liability internally for post-scheme service—but it does not replace existing obligations under the Long Service Leave Act.

When Is the First Payment Due?

This is the key question most NFP employers are asking right now.

Timeline for the first levy payment:

• The scheme started: 1 July 2025
• First reporting period covers: July 2025 – March 2026
• Service returns due: 14 April 2026
• First levy payment due: 31 May 2026 (extended deadline)

This means:

👉 Employers are making their first payment in 2026, not 2025
👉 The first payment covers multiple quarters (backdated)

What This Means Financially

For many not-for-profits, the biggest impact is cash flow and budgeting.

You’re effectively:

• Paying a bulk first contribution
• Covering 9 months of accrued levy at once

And importantly:

• There’s no guarantee funding contracts have increased to cover this cost

This is why many organisations are:

• Reforecasting FY26 budgets
• Reviewing pricing for services
• Factoring PLSL into grant submissions

Common Pitfalls to Avoid

From what we’re seeing across the sector, common challenges include:

1. Leaving registration too late
Registration deadlines have already passed for many organisations.

2. Underestimating the first payment
It’s not just one quarter—it’s three quarters combined.

3. Confusion about eligibility
Not all services fall within scope—“predominant purpose” matters.

4. Thinking this replaces existing LSL
It doesn’t—both systems may apply simultaneously.

Practical Steps for NFP Employers

To stay compliant (and avoid surprises):

• ✔ Confirm your organisation is in scope
• ✔ Ensure all workers are registered
• ✔ Prepare for the May 2026 payment deadline
• ✔ Review payroll systems for accurate reporting
• ✔ Build the levy into your future budgets and funding models

Final Thoughts

The Portable Long Service Leave scheme is a positive reform for workers—but for not-for-profits, it introduces new financial and compliance pressure.

The key is preparation.

With the first payment due by 31 May 2026, now is the time to:

• Understand your obligations
• Model your costs
• Put the right systems in place