Portable Long Service Leave: The Levy on Your Project and the Entitlement That Follows the Worker

A civil contractor wins a job in a neighbouring state, mobilises a crew, delivers the work and closes the project out. Eighteen months later a letter arrives from a statutory authority nobody in the business has heard of, asking why a levy was not paid before construction commenced and why no worker service returns have been lodged.

That is the portable long service leave system, and it catches contractors for a specific reason: it is administered separately in every jurisdiction, by a different body, under a different name, with different thresholds and different lodgement duties — and the obligation to pay the levy usually falls due before you start rather than at the end.

It is also a genuine cost. On a project of any size the levy is a line item that has to be in the price, and the ongoing employer contributions are part of the labour on-cost that sits underneath every rate you quote — the build-up described in our guide to enterprise agreements and labour rates.

Why construction has its own system

Ordinary long service leave requires continuous service with one employer over a long period. Construction does not work that way. Workers move between employers as projects start and finish, often through no choice of their own, and under the ordinary rules almost nobody in the industry would ever qualify.

The portable schemes solve that by attaching the entitlement to service in the industry rather than service with an employer. A worker accrues credit for time worked in construction regardless of how many employers they have had, and claims from the scheme when they reach the qualifying period.

Two consequences follow that shape everything else.

• The scheme needs to be funded, which is done through a levy on construction work and, in some jurisdictions, through employer contributions on wages.
• The scheme needs to know who worked and for how long, which is why employers must register and lodge returns. A worker’s entitlement depends entirely on employers reporting their service accurately.

That second point is worth pausing on. If you do not lodge returns, your workers do not accrue. The person harmed is not the authority — it is the operator who finds out years later that three years of service was never recorded.

Two obligations that get confused

Contractors routinely treat this as one thing. It is two, and they fall on different people at different times.

	The project levy	The employer obligation
What it is	A charge calculated on the value of construction work	Registration, plus periodic returns of each worker’s service, plus contributions where the scheme requires them
Who it falls on	Usually the person for whom the work is carried out — the principal or developer — though this varies	The employer of the worker
When	Typically before construction commences, as a condition of approval or notification	Ongoing, on a cycle set by the scheme
What happens if missed	Work may not lawfully commence; penalties; the levy is still payable	Penalties, back-payment, and workers who did not accrue
Where it lands for a civil SME	In the price, if you are the one paying it — check the contract	In the labour on-cost, always

The commercial question at tender stage is simply whether the levy is yours. On government and developer projects the principal usually pays it as part of obtaining approval. On some contracts it is passed to the contractor. It is a single line in the documents and it is worth finding, because on a large project the amount is not trivial.

The project levy: who pays and when

The levy is calculated as a percentage of the value of construction work, above a project value threshold, and is generally payable before construction starts. Councils and consent authorities in several jurisdictions will not release an approval or permit until the levy receipt is produced, which is the mechanism that makes it stick.

This guide states no levy rates and no project value thresholds. They differ in every jurisdiction, they are adjusted, and applying a remembered figure to a real project is how a bid ends up wrong. Take the current rate and threshold from the scheme authority for the jurisdiction where the work is performed.

What is generally true and useful for pricing:

• It is based on the value of construction work, defined by the scheme — which may or may not include items you would exclude, such as certain professional fees or GST. Read the definition.
• There is a project value threshold below which no levy is payable.
• It is usually payable by the person for whom the work is done, but the contract can shift it and sometimes does.
• Variations can trigger a further levy where the project value rises materially above the amount originally declared. This is genuinely easy to miss on a job with substantial variations.
• A refund may be available where the project value ends up lower than declared, or where the project does not proceed.
• Some categories of work are exempt, which vary by jurisdiction.

The variation point deserves attention. A project that grows through the mechanisms described in our guide to variations in civil construction contracts may cross into a further levy liability, and whoever paid the original levy is usually the one who owes the top-up. If that is you, it needs to be in the variation pricing.

Employer registration and worker returns

This is the obligation that is always yours, and the one most often neglected.

• Register as an employer with the scheme in each jurisdiction where you employ workers performing covered work.
• Register your workers, or ensure they are registered, so that service can be credited to them.
• Lodge returns on the scheme’s cycle — typically quarterly or annually depending on the jurisdiction — reporting each worker’s service and ordinary wages for the period.
• Pay contributions where the scheme is funded that way. Some schemes are funded principally by the project levy; others require employer contributions on wages as well. Establish which model applies to you.
• Keep records for the period the scheme requires.

Accuracy in the return matters more than contractors realise. The service you report is the service your worker accrues. Under-reporting days, omitting a worker, or failing to lodge for a quarter directly reduces someone’s entitlement, and when it is discovered — usually when they claim — the correction is yours to make and to fund.

Who is covered, and the edges that catch people

Coverage turns on the nature of the work and the nature of the engagement, and both have edges.

• The work must be construction work as the scheme defines it. Civil construction is squarely covered in every jurisdiction, though the precise definitions differ and some peripheral activities sit on the boundary.
• Employees are covered. This is straightforward.
• Working directors and self-employed contractors can often register voluntarily and accrue their own entitlement. Many civil business owners are unaware of this and lose years of accrual they could have had.
• Genuine independent contractors are treated differently by different schemes — some cover them, some do not, and some cover them only if they register.
• Apprentices and trainees are generally covered.
• Labour hire workers are usually the responsibility of the labour hire provider as their employer — but verify rather than assume, particularly given the licensing and responsibility questions covered in our guide to enterprise agreements and labour rates.
• Administrative and office staff are generally not covered by construction schemes, though some jurisdictions include certain on-site administrative roles.

The classification question here runs alongside the sham contracting risk. A person treated as a contractor who is legally an employee creates a portable long service leave exposure at the same time as a superannuation, workers compensation and tax exposure — one misclassification, four bills. That analysis belongs with your accountant and, where it is not obvious, with an employment lawyer.

The schemes, jurisdiction by jurisdiction

Every state and territory has one, established under its own legislation and administered by its own authority. The table below is a routing aid, not a statement of requirements — no rates, thresholds, qualifying periods or lodgement cycles are given, because all of them differ and change.

Jurisdiction	Scheme / authority commonly known as	What to confirm with them
Queensland	QLeave	Levy rate and threshold; employer registration; return cycle; whether your work is covered
New South Wales	Long Service Corporation	Levy on building and construction work; worker registration; return requirements
Victoria	CoINVEST	Employer registration and contribution obligations; how service is reported
South Australia	Portable Long Service Leave (SA scheme)	Registration and returns; coverage of your work type
Western Australia	MyLeave	Employer registration; return cycle; contribution basis
Tasmania	TasBuild	Registration and contributions
Australian Capital Territory	ACT Leave	Registration; note the ACT operates portable schemes across several industries
Northern Territory	NT Build	Levy on construction projects and registration obligations

Scheme names and administering bodies do change, and the table above reflects how they are commonly known rather than their formal legal titles. Search for the current construction portable long service leave authority in the relevant jurisdiction and deal with it directly. Each publishes clear guidance, an online lodgement system and a contact line, and they are generally helpful to contractors who approach them before there is a problem.

Working across a border

This is where civil contractors get into trouble, and it is increasingly common as businesses chase work interstate — the growth pattern examined in our guide to scaling a civil contracting business.

• The obligation generally follows where the work is performed, not where your business is registered. Taking a Queensland crew to a New South Wales job engages the New South Wales scheme.
• You may need to register in more than one jurisdiction, and lodge separate returns for the same worker in different periods.
• Reciprocal arrangements exist between schemes so that a worker’s service in different states can be recognised toward a single entitlement, and workers can transfer recorded service. The mechanics differ; the schemes will explain them.
• Do not double-report. Reporting the same period of service to two schemes is an error, and sorting it out afterwards is tedious.
• The project levy is a separate question again, determined by where the project is.

Before the first interstate job, contact the scheme in that jurisdiction and ask what you need to do. It is a fifteen-minute phone call that prevents the letter described at the start of this guide. The same discipline applies to the other cross-border obligations — workers compensation, covered in our guide to workers compensation and injury management, contractor licensing in our guide to contractor licensing by state, and payroll tax with your accountant.

Pricing it properly in a tender

Two separate places in the bid, and both are commonly missed.

• The project levy, if it is yours. Check the contract. If the contractor pays, it goes in preliminaries at the current rate on the correct value base, and any levy on subsequent variations goes into those variations.
• The employer contribution, in the labour on-cost. Where the scheme is contribution-funded, this is a percentage on ordinary wages that belongs in the all-up labour rate alongside superannuation, workers compensation premium, payroll tax, leave loading and the rest — the layering described in our guide to enterprise agreements and labour rates.

Three practical notes. An on-cost omitted from the rate is omitted from every hour you quote, which compounds across a job in a way a single missing preliminaries item does not. Rates change, so on a long contract this is one of the inputs worth considering in the escalation thinking covered in our guide to rise and fall and cost escalation. And never quote a levy figure from a previous job — confirm the current rate for the current project.

When a worker claims, and what it costs you

A key feature of these schemes, and one that surprises employers, concerns who actually funds the leave when it is taken.

• The worker claims from the scheme once they reach the qualifying period of recorded service in the industry.
• The payment is generally made by the scheme, or reimbursed to the employer who pays it — which is the point of the arrangement. You are not funding an entitlement built up across other employers.
• You still lose the person for the period, which is a resourcing matter, not a financial one.
• Your obligation is to have reported accurately so the entitlement exists.

There is a retention benefit here that civil SMEs rarely use. Workers value a portable entitlement, many do not know they have one, and fewer know how to check their balance. Telling your crew the scheme exists, confirming you lodge for them, and showing them how to check is close to free and it is a genuine differentiator in a labour market where operators are hard to keep.

The five failures that produce a bill

• Not registering in a jurisdiction you started working in. The most common one, and the one that generates the letter.
• Not lodging returns, or lodging them late and incompletely. Back-payment plus penalties, and workers who did not accrue.
• Under-reporting service — omitting overtime, casuals, or short-term workers.
• Missing the levy on a variation that pushed the project value materially above the declared amount.
• Misclassifying employees as contractors, which creates exposure here at the same time as elsewhere.

All five are discovered the same way: an audit, a worker’s claim, or the sale of the business. None of them is expensive to prevent and all of them are expensive to fix retrospectively, because the liability accrues quietly across years before anyone looks.

Business sale, restructure and accrued liability

This becomes acutely relevant at two moments, and both are covered from the other side in our guide to buying and selling a civil contracting business.

• Due diligence. Unregistered jurisdictions, unlodged returns and unpaid contributions are exactly what a buyer’s adviser looks for, and they are easy to find. An unresolved exposure reduces the price or holds up the transaction.
• Share sale versus asset sale. In a share sale the company keeps its history and its liabilities. In an asset sale, the treatment of employees and their accrued entitlements has to be dealt with expressly.
• Restructures. Moving employees between related entities can disturb continuity of service and reported history if it is not handled with the scheme.

If a sale or restructure is anywhere on the horizon, tidy this up first. It is one of the cheaper items on any pre-sale list and one of the more visible ones if left undone.

Getting the administration right

• List every jurisdiction you have worked in in the last several years, not just where you are based.
• Confirm registration in each, and register where you are not.
• Put the return cycle in the calendar with the same status as a BAS.
• Generate the return from payroll rather than by hand — most payroll systems can produce the required data, and hand-keying is where under-reporting comes from.
• Include the levy in the pre-construction checklist for every project, alongside the other pre-start obligations in our guide to contract award and mobilisation — establish who is paying it and confirm it has been paid before work starts.
• Re-check the levy when project value changes materially.
• Register yourself if you are a working director and the scheme permits it.
• Tell your workers the scheme exists and how to check their balance.
• Assign it to one person, with the correspondence going to an address that is monitored.

Checklist

• Are you registered as an employer with the scheme in every jurisdiction where you employ workers on covered work?
• Have you checked which jurisdictions you have worked in over recent years, not just where you are based?
• Are returns lodged on the scheme’s cycle, on time and complete?
• Are returns generated from payroll rather than keyed by hand?
• Does the return include casuals, short-term workers and overtime where the scheme requires it?
• Does the contract say who pays the project levy?
• If it is yours, is it priced at the current rate on the correct value base?
• Has the levy been paid before construction commenced, where that is required?
• Have you re-checked the levy after material variations increased the project value?
• Is the employer contribution, where applicable, layered into the all-up labour rate?
• Have you confirmed the treatment of independent contractors and working directors with the scheme?
• Are you satisfied that people engaged as contractors are not legally employees?
• For labour hire, have you confirmed the provider is registered and lodging?
• Before an interstate job, have you contacted the scheme in that jurisdiction?
• Are you avoiding double-reporting the same service to two schemes?
• Are records kept for the period the scheme requires?
• Do your workers know the entitlement exists and how to check their balance?
• If a sale or restructure is likely, has this been reviewed and tidied?
• Is one named person responsible, with correspondence going to a monitored address?

Sources and further reading

This guide is general information for Australian civil construction businesses and is not legal, employment, accounting or taxation advice. It deliberately states no levy rates, project value thresholds, qualifying periods, contribution percentages or lodgement cycles: portable long service leave for construction is established under separate legislation in each state and territory, administered by different authorities, and every one of those figures differs by jurisdiction and is adjusted over time. Scheme names and administering bodies also change. Confirm the current requirements directly with the scheme authority in each jurisdiction where you perform work or employ workers. Whether particular work is covered, whether a person is an employee or a genuine independent contractor, and how accrued entitlements are treated on a business sale or restructure are questions that turn on specific facts and should be resolved with the scheme, your accountant and, where the answer is not clear, an employment lawyer. Misclassifying an employee as a contractor creates simultaneous exposure under long service leave, superannuation, workers compensation and taxation law.

• Portable long service leave schemes for the building and construction industry, established under separate legislation in each Australian state and territory and administered by the authority in each jurisdiction, referenced throughout and listed as a routing aid in §06. The table gives the names by which the schemes are commonly known rather than formal legal titles, and includes no rates, thresholds, qualifying periods or cycles because all of these differ by jurisdiction and change. Each authority publishes current guidance, registration and lodgement systems; those are the operative source.
• The levy mechanism described in §03 — a charge on the value of construction work above a project threshold, commonly payable before construction commences and frequently tied to release of an approval or permit — is the general structure across jurisdictions. The person on whom the levy falls, the definition of construction value, exemptions and refund arrangements are all set by the relevant scheme legislation.
• Reciprocal recognition of service between state and territory schemes, referenced in §07, allows a worker’s service in different jurisdictions to count toward a single entitlement. The mechanics, and any requirement for the worker to apply for transfer, are administered by the schemes.
• The observation in §09 that the scheme rather than the employer generally funds the leave payment reflects the design of these arrangements; the precise payment and reimbursement mechanism differs between jurisdictions and should be confirmed with the relevant authority.
• Related TenderBuilt guides carrying the primary-source detail referenced above: enterprise agreements and labour rates, workers compensation and injury management, contractor licensing by state, scaling a civil contracting business, buying and selling a civil contracting business, contract award and mobilisation, variations in civil construction contracts, rise and fall and cost escalation and preparing civil works cost estimates.