Annual Leave in Australia: Your Complete Rights Guide
Learn your annual leave entitlements in Australia. Full-time employees get 4 weeks per year. Covers pro-rata, leave loading, cashing out, and leave on termination.
How much annual leave do you get?
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 are 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.
Pro-rata annual leave for part-time employees
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 and annual leave
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 are not 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.
Leave loading: the 17.5% extra
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 did not suffer financially when taking leave. Leave loading is not 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.
Cashing out annual leave
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 are 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 are paid at least the full amount they would have been paid if they took the leave. Under enterprise agreements, similar safeguards apply. You cannot be forced to cash out annual leave. The intention of these restrictions is to ensure employees actually take rest time. Employers also cannot make an employee take annual leave instead of paying them for it.
Annual leave on termination
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.
Can your employer refuse or direct annual leave?
An employer can refuse an annual leave request if it is not 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 is a dispute about whether a refusal or direction is reasonable.
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General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.
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