What is the NSW break lease fee schedule?
The break lease fee in NSW is a fixed amount set by law — 4, 3, 2, or 1 week’s rent depending on how far through your lease you are when you leave.
If you’re thinking about ending your lease early, this fee is probably your biggest financial question. This article explains exactly what the law says, when it applies, and what a typical tenant would owe.
What the law actually says
Under section 107 of the Residential Tenancies Act 2010, there is a set fee schedule for breaking a fixed-term lease. The fee depends on what percentage of the lease term had expired when the premises were abandoned — in practice, when you moved out early without a ground under the Act that lets you go without paying compensation.
Here is the schedule from s107:
| How far through your lease | Break fee |
|---|---|
| Less than 25% of the term completed | 4 weeks rent |
| 25% or more, but less than 50% completed | 3 weeks rent |
| 50% or more, but less than 75% completed | 2 weeks rent |
| 75% or more completed | 1 week’s rent |
The “rent” used to calculate this is your regular weekly rent amount — the same figure on your lease agreement.
This is a fixed fee. It is not an estimate of the landlord’s actual losses. The law sets the number, and that is what you owe. If this fixed fee applies, it is the only amount the landlord can claim for your early exit — they cannot add advertising fees, re-letting fees, or other costs on top.
Section 107 sits in the Act’s “Abandonment” division. In practice, the schedule is applied when a tenant leaves a fixed-term lease before the end date without a no-compensation ground under the Act — the landlord treats the early exit as abandonment, and the fee schedule caps what they can claim.
When this fee schedule applies — and when it doesn’t
Two things have to be true before the schedule is in play at all. First, as above, s107 is an abandonment provision — it is engaged when a tenant leaves the fixed term early without a ground under the Act that allows it, and s107(4) measures the percentage “when the premises were abandoned”. The schedule sets the amount; it is not a fee that applies on its own. Second, the s107 schedule only applies to fixed-term agreements of not more than 3 years. This is an important condition.
If your fixed-term lease is longer than 3 years, the s107 schedule does not apply. In that case the landlord can apply to the Tribunal under s107(1) for compensation based on actual loss caused by the tenant leaving — typically lost rent while the property sits empty, and reletting-related costs that the Tribunal accepts. For these longer leases, the landlord’s duty to take reasonable steps to reduce that loss (s107(2)) does apply.
The schedule also does not apply to periodic (month-to-month) agreements. There is no fixed term to measure a percentage against, so the same formula cannot work.
For most renters signing a standard 12-month or 6-month lease, the s107 schedule is the one that applies.
These rules apply to fixed-term leases signed on or after 23 March 2020, when s107 was rewritten. If your lease is from before then, an older regime may apply — check the “Additional terms” section of your agreement.
Worked examples
Example 1: Breaking a 12-month lease at month 4
Your lease runs 12 months. You leave at the 4-month mark. That is one-third of the way through — roughly 33% of the term completed.
33% falls in the “25% or more but less than 50%” bracket. Your break fee is 3 weeks rent.
If your weekly rent is $550, you owe $550 × 3 = $1,650.
Example 2: Breaking a 12-month lease in month 10
Same 12-month lease. You leave after 10 months. That is about 83% of the term completed.
83% falls in the “75% or more” bracket. Your break fee is 1 week’s rent.
At $550 per week, you owe $550.
These examples show why it matters when you leave. Leaving in month 2 costs four times as much as leaving in month 11.
What else you may owe — and what you can recover
Money you have already paid is credited
Under s107(5), any money you have already paid the landlord on ending the agreement early — for example, prepaid rent covering time after you leave — is credited against the break fee. Importantly, this credit does not include rent arrears you already owe: pre-existing debts to the landlord are not offset against the break fee under s107(5). Arrears are recovered separately.
The bond is a separate matter
The break fee and your rental bond are two different things. Your landlord does not automatically keep your bond to cover the break fee. The bond process has its own rules. If you want to understand what a landlord can and cannot claim from your bond, the article What can a landlord deduct from my bond in NSW? explains that in full.
Why there is no “landlord must re-let” argument here
For fixed-term leases of 3 years or less, s107(2) expressly switches off the landlord’s normal duty to mitigate (limit) losses. The break fee is a fixed pre-agreed number: the landlord does not have to prove any actual loss, and you cannot reduce what you owe by arguing they should have found a new tenant faster. The trade-off is that the fee is capped at the weeks-of-rent number in the schedule — the landlord cannot go higher even if the property sits empty for months.
How to actually break the lease properly
Paying the break fee is only one part of ending your tenancy early. You also need to give the right notice, end the agreement correctly, and hand back the property in good condition.
The full process — including how to give notice, what happens to your bond, and what to do if your landlord disputes anything — is covered in How do I break my lease early in NSW?. Read that alongside this article so you understand both what you owe and what steps you need to follow.
Wondering how the break fee applies to your specific lease?
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One last thing to know
The s107 break fee schedule exists specifically to give both sides certainty. Before this law, breaking a lease could lead to open-ended disputes about lost rent and reletting costs. The fixed schedule means you can calculate your liability the day you decide to leave. That number is the cap on what the landlord can claim under this pathway — not a starting point for negotiation.