Annual leave entitlement in Australia: 4 weeks, leave loading and cashing out

Under the National Employment Standards (NES), full-time and part-time employees in Australia get 4 weeks of paid annual leave for each year of service, or 5 weeks if they count as shiftworkers. Leave loading, often 17.5%, comes from a modern award or agreement rather than the NES, and cashing out is allowed only by separate written agreement that leaves at least 4 weeks in the balance.

This guide uses the Fair Work Act 2009 and the Clerks—Private Sector Award 2020 as the worked example, as of 2026.

How much annual leave do you get in Australia?

Section 87 of the Fair Work Act sets the minimum. For each year of service, an employee is entitled to:

Employee	Annual leave per year of service
Full-time or part-time (most employees)	4 weeks paid
Shiftworker, as defined by their award or enterprise agreement	5 weeks paid
Award/agreement-free shiftworker who meets the test below	5 weeks paid
Casual employee	None (the annual leave rules don't apply to casuals)

The annual leave division of the NES "applies to employees, other than casual employees", so casuals don't accrue paid annual leave.

Part-time employees get the same 4 weeks, measured in their own ordinary hours. Someone whose ordinary hours are 20 a week builds up 80 hours over a year; someone on 38 ordinary hours a week builds up 152 hours.

Who counts as a shiftworker for 5 weeks of annual leave?

If a modern award or enterprise agreement covers the employee, that document decides: the fifth week applies when it "defines or describes the employee as a shiftworker for the purposes of the National Employment Standards".

For award/agreement-free employees, the Act sets its own test. All three must be true:

1. They work in a business where shifts are continuously rostered 24 hours a day, 7 days a week.
2. They are regularly rostered to work those shifts.
3. They regularly work on Sundays and public holidays.

Employees in a class prescribed by the regulations can also qualify. A 38-hour-a-week shiftworker on 5 weeks accrues 190 hours a year.

How does annual leave accrue?

Annual leave "accrues progressively during a year of service ... according to the employee's ordinary hours of work, and accumulates from year to year". In practice:

• It builds up every pay period, not in one lump on the anniversary date. A new starter has a small balance after the first week.
• It's tied to ordinary hours, not overtime. Extra hours above ordinary hours don't add leave.
• Unused leave carries over. There's no NES rule that it expires at the end of the year. If employment ends partway through a year, leave accrues up to the last day.

For the general mechanics of rolling balances forward, see holiday carry-over and leave accrual explained.

What are you paid during annual leave?

Under section 90, the employer must pay the employee's base rate of pay for their ordinary hours during the leave. When employment ends, any untaken annual leave must be paid out at the amount the employee would have received had they taken it.

Two related NES rules:

• If a public holiday falls during annual leave, the employee is "taken not to be on paid annual leave on that public holiday", so it doesn't come out of the balance.
• An employer "must not unreasonably refuse" an employee's request to take paid annual leave (section 88).

Is leave loading 17.5% for everyone?

No. Leave loading isn't part of the NES, which only guarantees the base rate. It comes from the employee's modern award, enterprise agreement or contract, and the rate and formula vary.

17.5% is the figure you'll see most often. The Clerks—Private Sector Award 2020 is a typical example. For a day worker, the extra payment is the greater of:

• 17.5% of the minimum hourly rate for their ordinary hours during the leave, or
• the minimum hourly rate including the weekend penalty rates they would have earned.

For shiftworkers under that award, it's the greater of 17.5% or the shift and weekend penalties they would have earned. Other awards calculate loading differently, and some employees have no loading at all. Check the specific award or agreement.

Can you cash out annual leave in Australia?

Yes, but only within strict limits. Annual leave can be cashed out only under cashing-out terms in a modern award or enterprise agreement, or, for award/agreement-free employees, by agreement with the employer. Whatever the route, the Fair Work Act requires:

Rule	What it means
At least 4 weeks left	Cashing out can't take the remaining balance below 4 weeks
Separate written agreement	Each cash-out needs its own written agreement, not a standing arrangement
Full payment	At least what the employee would have been paid had they taken the leave

Awards can add more conditions. Under the Clerks award, each agreement must state the amount of leave, the payment and the payment date, be signed by both sides (and by a parent or guardian if the employee is under 18), and no more than 2 weeks can be cashed out in any 12-month period. The award also notes that employers must not exert undue influence or pressure on an employee to make, or not make, a cash-out agreement.

Example: an employee covered by the Clerks award has 7 weeks banked. They can cash out at most 2 weeks in that 12-month period, leaving 5. An award/agreement-free employee with the same balance could agree to cash out up to 3 weeks, leaving the minimum 4.

Can my employer make me take annual leave?

Sometimes. There are three situations:

Excessive leave under an award. Many awards, including the Clerks award, define an excessive accrual as more than 8 weeks (or more than 10 weeks for a shiftworker). The employer and employee should first genuinely try to agree on a plan. If that fails, the employer can direct the employee in writing to take leave, but the direction:

• has no effect if it would leave the employee with less than 6 weeks accrued,
• can't require a block of less than one week,
• must start at least 8 weeks and at most 12 months after the direction is given,
• must not clash with leave already agreed.

The employee can still ask for leave on dates of their own choosing instead. The award also works the other way: an employee who has had an excessive accrual for more than 6 months, and whose employer won't agree on a plan, can give written notice to take leave, up to 4 weeks (5 for shiftworkers) in 12 months.

Shutdowns. The Clerks award lets an employer direct staff to take accrued annual leave during a temporary shutdown, with 28 days' written notice (or a shorter period agreed with most of the affected staff). The direction must be in writing and reasonable.

Award/agreement-free employees. The employer can require them to take paid annual leave "only if the requirement is reasonable". The Act gives two examples: an excessive accrual, or a shutdown such as between Christmas and New Year.

For the wider question across countries, see can my employer make me take holiday, and for managing staff who never book time off, what to do when an employee isn't taking holiday.

Tracking Australian annual leave

Absenca tracks leave in days, half-days or hours, with accrual, carry-over and public holidays set per office, so a Sydney team's balances and holidays stay separate from other offices. It doesn't calculate pay or loading, so that stays in payroll. The free plan covers up to 10 people.

FAQ

Do casual employees get annual leave in Australia?

No. The NES annual leave division applies to employees other than casual employees, so casuals don't accrue paid annual leave.

Does annual leave expire in Australia?

Not under the NES. Annual leave accumulates from year to year.

Is leave loading paid on unused leave when I resign?

The NES requires untaken annual leave to be paid out at the amount you'd have received had you taken it. Whether loading is included depends on your award or agreement, so check its annual leave clause.

How much annual leave can I cash out?

Your balance must stay at 4 weeks or more after cashing out, and each cash-out needs its own written agreement. Many awards, such as the Clerks award, also cap it at 2 weeks in any 12 months.

Do public holidays during annual leave come off my balance?

No. If a public holiday falls during annual leave, you're treated as not being on annual leave that day.

Rules vary by award and agreement and can change; check the official source at fairwork.gov.au or legislation.gov.au before acting.