The objective of this study is about the income tax rules and regulations which applies one employee’s long service payment in Papua New Guinea under various cases. Papua New Guinea Income Tax System is based on the progressive nature i.e. as when the income level increase, income tax percentage rate also will increase thus, employees are heavily taxed under the salary and wages tax system of the country. The salary and wages tax have been amended at various stages throughout the budget proposals due to the changes in by the different regime of governments in Papua New Guinea. The salary and wages tax was introduced by the Australian Government before Papua New Guinea got its independence from Australia. It does not support the ordinary employees of PNG with their current salary and wages tax system The researcher is more focused on the employees ‘long service payments based on the different case studies. The readers of this paper can have a clearer understanding of the salary and wages tax rate application. The study has been done based on the author’s previous research paper on fortnightly salary and wages tax system in Papua New Guinea with the experiences of lecturing corporate tax and business industry for the last twelve years.