Can I cash out annual leave without quitting my job?

Yes, while still employed — but only if the rules in the Fair Work Act are met. Award and enterprise agreement employees can only cash out annual leave if their award or agreement allows it (most modern awards do). You must keep at least 4 weeks of accrued annual leave after the cash-out, sign a separate written agreement each time, and be paid at least what you would have received had you taken the leave. Your employer cannot force or pressure you to cash out. Source: Fair Work Act 2009 ss 92-94; Fair Work Ombudsman, checked July 2026.

How much annual leave can I cash out?

At most, your balance minus 4 weeks — at least 4 weeks of accrued annual leave must remain after any cash-out. Under most modern awards there is an extra cap: a maximum of 2 weeks cashed out in any 12-month period. Award/agreement-free employees have no statutory 2-week annual cap under s94 of the Fair Work Act, but the 4-week minimum balance still applies. Example: with 7 weeks accrued under an award and nothing cashed out this year, you can cash out up to 2 weeks.

How is cashed out annual leave taxed?

Annual leave cashed out while you are still employed is ordinary salary taxed at your marginal income tax rate — there is no special concessional rate. Your employer withholds tax using the ATO's Schedule 5 lump-sum method, which averages the payment across the year's pay periods, so the withholding on that single pay can look high; any over-withholding washes out when you lodge your tax return. Different (Schedule 7) rules apply only to unused leave paid out on termination. Source: ATO, checked July 2026.

Do I get leave loading when I cash out annual leave?

Yes, where it applies. The Fair Work Act requires the cash-out payment to be at least the full amount you would have been paid had you taken the leave — so if your award or agreement provides annual leave loading (typically 17.5%), the cashed-out amount must include it.

Can employees under 18 cash out annual leave?

Only if a parent or guardian also signs the written cash-out agreement. This requirement appears in s94(5) of the Fair Work Act for award/agreement-free employees and is mirrored in the standard cashing-out clauses of modern awards.

Cashing Out Annual Leave Calculator

Can you legally cash out annual leave, and how much would you get? Award rules, the 4-week minimum balance, written agreement requirements and the dollar figure.

Last verified: 20 July 2026

How is your leave balance shown?

Weeks

Balance is in weeks

Hours

Balance is in hours (most payslips)

Annual leave balance (weeks)*

weeks

Your current accrued annual leave balance.

Weekly base pay (gross)*

Your gross base pay for ordinary weekly hours, before tax.

Are you covered by an award or enterprise agreement?

Award / agreement

Most employees — the 2-week per 12-month cap applies

Award/agreement-free

No award or agreement applies — s94 rules, no 2-week cap

Leave already cashed out in the last 12 months

weeks

Most modern awards cap cashing out at 2 weeks in any 12-month period.

Does annual leave loading apply?

Yes

Your award or agreement pays loading on annual leave

No leave loading (check your award)

Leave loading rate

17.5% under most modern awards.

I am under 18

A parent or guardian must also sign the cash-out agreement for under-18s.

The rules, in short

Cashing out annual leave is legal under the Fair Work Act 2009 (ss 92–94), but every one of these conditions must hold. Award and agreement employees can only cash out if their award or agreement has a cashing-out clause — most modern awards added one in 2016, with a cap of 2 weeks cashed out in any 12 months. Award/agreement-free employees use s94 directly, which has no 2-week annual cap.

At least 4 weeks of accrued annual leave must remain after the cash-out.
A separate written agreement is required on each occasion.
The payment must be at least what you would have been paid had you taken the leave, including leave loading where your award provides it.
Your employer can't force or pressure you to cash out.
If you're under 18, a parent or guardian must also sign the agreement.

Sources: Fair Work Act 2009 (Cth) ss 92–94; Fair Work Ombudsman, “Cashing out annual leave”; ATO Schedule 5 (withholding on lump sums paid in service). Rules checked 20 July 2026.

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General information and estimates only — not legal, financial or tax advice. Always check your specific award, agreement or contract, or a qualified professional, before you rely on the result.

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