Annual Leave Australia: 4 Weeks + 17.5% Loading Explained

Under the National Employment Standards, full-time employees are entitled to 4 weeks (20 days) of paid annual leave per year. This accrues progressively throughout the year based on your ordinary hours of work, starting from your first day of employment. For a full-time employee working 38 hours per week, this equates to 152 hours of annual leave per year, or approximately 2.923 hours per week.

Annual leave accumulates and carries over from year to year — there is no use-it-or-lose-it rule under the NES. Some awards provide 5 weeks of annual leave for certain shift workers who're regularly rostered to work on Sundays and public holidays.

Part-time employees receive annual leave on a pro-rata basis according to their ordinary hours.

Part-time employees accrue annual leave proportional to their ordinary hours of work. For example, a part-time employee working 20 hours per week (approximately 0.53 of full-time) would accrue 4 weeks of annual leave per year, but each week is only 20 hours. So they accrue 80 hours of annual leave per year, compared to 152 hours for a full-time worker.

The leave accrues progressively — each pay period, a portion of leave is credited. When the part-time employee takes a day of annual leave, they are paid for the hours they would have ordinarily worked that day.

If a part-time employee's hours vary, leave accrual is based on the average pattern of ordinary hours over the period of employment, or as specified in the relevant award.

Casual employees are not entitled to paid annual leave. This is one of the key differences between casual and permanent employment. To compensate for the lack of paid leave (among other entitlements), casual employees receive a casual loading — typically 25% on top of the base hourly rate under most Modern Awards.

This means that while casuals earn more per hour, they do not accumulate leave and aren't paid when they take time off. If a casual employee converts to permanent employment (full-time or part-time), their annual leave entitlement begins accruing from the conversion date.

Prior casual service does not count toward annual leave accrual, though it may count for other purposes like determining the notice period or redundancy entitlements.

Many Modern Awards and enterprise agreements provide for an annual leave loading of 17.5% on top of the employee's base rate of pay when they take annual leave. This means when you take a week of annual leave, you are paid your normal base pay plus an extra 17.5%. The loading originated from an era when many workers relied on penalty rates and overtime, and the loading was intended to ensure they didn't suffer financially when taking leave.

Leave loading isn't part of the NES — it is an award or agreement entitlement. Not all awards provide leave loading, and some calculate it differently (for example, some pay the higher of leave loading or the shift penalties the employee would have received).

Check your specific award.

In limited circumstances, annual leave can be cashed out (paid to the employee instead of taken as time off). The rules vary depending on whether you're covered by an award or an enterprise agreement. Under a Modern Award, an employee can only cash out leave if the award permits it, a written agreement is made each time, the employee retains a balance of at least 4 weeks after cashing out, and they're paid at least the full amount they would have been paid if they took the leave.

Under enterprise agreements, similar safeguards apply. You can't be forced to cash out annual leave.

Quick version: The intention of these restrictions is to ensure employees actually take rest time. Employers also can't make an employee take annual leave instead of paying them for it.

When your employment ends — whether by resignation, dismissal, or redundancy — you must be paid out all accrued but untaken annual leave in your final pay. This applies regardless of the reason for termination, including dismissal for serious misconduct. The payout is calculated at your base rate of pay at the time of termination.

Whether leave loading is paid out on termination depends on your award or enterprise agreement — most awards do require it, but some are silent on the matter. Your employer must include the annual leave payout in your final pay, which should be provided within 7 days of termination or on the next regular pay day.

Check your final pay slip carefully against our Leave Entitlements Calculator to ensure the accrual is correct.

An employer can refuse an annual leave request if it isn't reasonable in the circumstances, taking into account factors like the needs of the business, the employee's personal needs, and how much notice was given. However, an employer cannot unreasonably refuse a request. Some awards and agreements allow an employer to direct an employee to take annual leave in certain circumstances — for example, during a shutdown period (like a Christmas/New Year closure), or if the employee has accumulated an excessive amount of leave (typically more than 8 weeks).

The employer must generally give at least 4 weeks' notice before directing leave. The Fair Work Ombudsman can assist if there's a dispute about whether a refusal or direction is reasonable.

Understanding the dollar value of your annual leave makes it clear why this entitlement matters. At a salary of $50,000 per year ($26.32/hr), 4 weeks of annual leave is worth $3,846 in paid time off. With 17.5% leave loading, that becomes $4,519 — an extra $673.

At $65,000 ($34.21/hr), your 4 weeks are worth $5,000 without loading, or $5,875 with the 17.5% loading applied. At $80,000 ($42.11/hr), it's $6,154 base value or $7,231 with loading.

At $100,000 ($52.63/hr), your annual leave is worth $7,692 before loading, rising to $9,038 when the loading is applied. At $120,000 ($63.16/hr), those 4 weeks are worth $9,231 base or $10,846 with loading. For shift workers entitled to 5 weeks of annual leave, these figures increase by 25%. The leave loading alone can be worth between $500 and $1,500 per year for most workers — money that is often overlooked when comparing job offers.

When you receive a salary offer, consider the total package including leave entitlements. A casual worker would need to earn significantly more per hour to match the total value of a permanent role once annual leave (and its loading), personal leave, redundancy protections, and notice of termination are all factored in.

While there is no legal cap on how much annual leave you can accumulate under the NES, excessive leave balances can create issues. Most modern awards define an excessive leave balance as more than 8 weeks for standard employees, or more than 10 weeks for shiftworkers. When your balance reaches excessive levels, your employer can direct you to take leave under certain conditions.

They must first genuinely try to reach agreement with you about taking leave. If agreement can't be reached, the employer can direct you to take leave, but they must give at least 8 weeks' written notice, they cannot direct you to take leave that would reduce your balance below 6 weeks, and any direction must be reasonable.

From the employee's perspective, if you've an excessive balance, you can also require your employer to grant leave — you can give at least 4 weeks' notice requesting leave, and the employer can only refuse on reasonable business grounds. If the employer does refuse, the matter can be referred to the Fair Work Commission for resolution. Practically, excessive leave balances represent a financial liability for employers (because the leave must eventually be paid out at the current rate, which may be higher than when it was accrued), so most employers actively encourage staff to use their leave. Some enterprise agreements include use-it-or-lose-it provisions or automatic leave purchase schemes to manage excessive balances, though these must still comply with the NES minimum of 4 weeks (yes, really).

Several common situations raise questions about how annual leave interacts with other employment events. During notice periods: if you resign or are given notice, you can take annual leave during the notice period if both you and your employer agree. However, an employer generally cannot force you to use your annual leave to cover the notice period — if they want you to stop working immediately, they should pay you in lieu of notice separately.

Any unused leave is paid out in your final pay regardless. During shutdown periods: many awards allow employers to direct staff to take annual leave during a temporary shutdown (such as a Christmas closure).

The employer must give at least 28 days' notice. If an employee doesn't have enough accrued leave to cover the shutdown, they may need to take unpaid leave, leave in advance, or another form of leave by agreement. During public holidays: if a public holiday falls during your annual leave, it's not deducted from your leave balance — you're treated as being on a public holiday, not on annual leave. What this means is a two-week holiday over Easter, which includes Good Friday and Easter Monday, only costs you 8 days of annual leave, not 10.

The same applies to any other public holiday that falls within your leave period. Annual leave also continues to accrue while you are on other forms of paid leave, including personal leave, long service leave, and parental leave (the paid component) (check your payslip).

Under many modern awards, shift workers are entitled to 5 weeks of annual leave per year instead of the standard 4 weeks. This additional week recognises the additional strain of working irregular hours, nights, weekends, and public holidays on a regular basis. However, the definition of 'shift worker' for annual leave purposes varies between awards and is more restrictive than most people expect.

The short answer? Generally, you qualify for the extra week if you are employed in a business where shifts are continuously rostered 24 hours a day, 7 days a week, and you are regularly rostered to work those shifts. Simply working occasional weekends or doing some night shifts doesn't automatically make you a shift worker for this purpose.

Each award has its own specific definition — for example, under the Manufacturing Award, a shift worker for annual leave purposes is one who works in a continuously operating production process. Under the Nurses Award, shift workers must be regularly rostered over 7 days per week. If you believe you qualify for 5 weeks but are only receiving 4, check the specific shift worker definition in your award. The extra week accrues progressively just like the standard 4 weeks and is paid out on termination if unused.

For a full-time employee earning $70,000 per year, the fifth week of annual leave is worth approximately $1,346 plus leave loading — a significant entitlement worth claiming if you are eligible.