The vertical leakage to confined aquifers is rarely quantified in complex settings, where the recharge zone is characterized by both diffuse and preferential flows. In such setting, conventional hydraulic or tracer based estimation of recharge or vertical leakage is problematic, unless the effects of duality of flow regimes are considered. A water balance approach by the use of calibrated groundwater models can be used, as the mass balance is independent of the particular mode of recharge and vertical leakage processes. Here, we adopt a water balance approach to provide a first order assessment of recharge to the unconfined Tertiary limestone aquifer (TLA) and vertical leakage to the Tertiary confined sand aquifer (TCSA) within the Glencoe-Nangwarry-Nagwarry (GNN) recharge zone of the Gambier Basin in South Australia. Despite many studies expressing concern about the impact of land use on recharge to the TLA and vertical leakage to the TCSA, no estimates have been made to quantify the vertical leakage within the GNN recharge zone. In the GNN recharge zone, relatively high recharge to the unconfined aquifer and vertical leakage to the confined aquifer occurs as a result of both diffuse and preferential flow processes. This is due to presence of structural faults and thin or absent aquitard. Within the Hundred of Nangwarry, where 83% of the area is covered with plantation forest, the model calculated recharge to the TLA of 80 mm•year −1 , about 44% reduction compared to adjacent non-forested area (144 mm•year −1). Vertical leakage to the TCSA within the Hundred of Nangwarry area is higher (84.5 mm•year −1) than recharge to the TLA. Higher vertical leakage combined with the reduced recharge to TLA * Corresponding author. N. Somaratne et al. 184 resulted in depletion of the TLA storage, as evidenced by drying of the TLA at one locality. In contrast, in plantation forest areas where diffuse recharge is the dominant process (Hundred of Penola), recharge to the TLA is about 19 mm•year −1 , a 78% reduction compared to the non-forested areas, a mix of irrigation and dryland pasture. In these areas, vertical leakage to the TCSA is much smaller: 8 mm•year −1 through a thick aquitard. Simulation of a management scenario in which plantation forest is replaced by dryland pasture in the Hundred of Nangwarry results in 135 mm•year −1 recharge to TLA and a 98 mm•year −1 vertical leakage to the TCSA.