Dawn Hough, director of ACON's Pride Inclusion Programs, which collected the data says the new figures are a big improvement on those reported as recently as six years ago when the vast majority of people surveyed would hide their sexual identity.

However, Ms Hough said she was surprised people were much less comfortable to come out in the public sector compared to the private sector.

"It is the first time we have done any significant analysis between the public and the private sectors and we are really quite surprised at that," she said.

"People in the public sector feel there is less support, they feel their senior management are less likely to genuinely support inclusion initiatives."

The new 2016 Australian Workplace Equality Index found 45 per cent of lesbian, gay, bisexual, transgender and/or intersex Australians hide their sexuality or gender identity at work because they fear it may damage their career. The other 55 per cent were out in the workplace.

The survey of 65 different organisations from the private and public sectors analysed 13,258 responses.

The most common reasons given for not being out at work included people not wanting to be "labelled" according to their sexual identity and a fear this could limit their career prospects.

Others were concerned their identity might make others in the workplace uncomfortable and some feared they may become the target of jokes and innuendo.

The people surveyed work in organisations that have LGBTI workplace inclusion programs.

"We expect that the results would be significantly worse if we surveyed employees from organisations that were not active in this space," Ms Hough said.

"What you've actually got is quite high levels of people who are comfortable being out.

"Five or six years ago you would not have got anywhere near that.

"There is still a level of uncertainty around what the risk will be to a career and that is one of the top reasons for not coming out, in addition to not wanting to be labelled."

The Australian Workplace Equality Index found 55 per cent of employees surveyed were completely out about their sexual identity in the workplace.

One third of people who were not out said they spent a lot of energy hiding their sexual orientation. Younger people aged between 18 to 24 were even less likely to be out at work compared to those aged 25 to 34.

Suzi Russell-Gilford, a partner at PwC and founder of its GLEE (gays, lesbians and everyone else) network said many Generation Y LGBTI graduates at university who are out at university go back in the closet when they start their first job.

"They come into an environment with people quite formally dressed and feel they don't want to show that side of themselves to their colleagues," Ms Russell-Gilford said.

"I come across that a lot. I am continuously surprised people I come across think it would damage their careers to come out.

"A lot of leadership team embraces difference, but a lot of the graduates aren't exposed to the leadership team when they first come into a corporate environment. It's not until later in their career that they realise people are quite flexible about their sexuality."