Annual leave is an essential workplace entitlement that allows employees to take paid time off work to rest, travel, or spend time with loved ones. Established in 1970 after a significant union campaign, annual leave is a crucial benefit that ensures workers can maintain a healthy work-life balance. Understanding how it works, how it accumulates, and when you can take it is vital for making the most of this entitlement.
How Much Annual Leave Are You Entitled To?
In Australia, full-time employees are entitled to a minimum of four weeks of annual leave per year, while part-time employees receive a proportional amount based on their hours worked. Some awards and agreements provide additional leave entitlements, such as five weeks for shift workers.
Casual employees generally do not receive annual leave unless it is negotiated as part of their employment agreement.
How Annual Leave Accumulates
Annual leave starts accumulating from your first day of work, even if you are still in a probation period. It continues to accumulate when you are:
- On paid leave (such as sick or parental leave)
- Performing community service
- Serving on jury duty
However, annual leave does not accumulate when you are:
- On unpaid leave (unless performing community service)
- Receiving payments under the Federal Government’s Paid Parental Leave Scheme
- Stood down from work
At the end of the year, any unused annual leave rolls over into the next year, meaning you don’t lose any accrued leave if you haven’t taken it.
When and How to Take Annual Leave
Employees can take annual leave as soon as they have accumulated it. There is no minimum amount that must be taken at once—you can take it as a single day off or plan for a longer holiday, depending on what you have accrued.
Most workplaces require employees to submit a leave request, and while an employer can refuse an annual leave request, they must provide a reasonable explanation for doing so. Common reasons for refusal include peak business periods or lack of adequate staffing to cover absences. However, employers cannot unreasonably prevent an employee from using their accrued leave.
Can Your Employer Make You Take Annual Leave?
In certain circumstances, an employer can require you to take annual leave, such as when you have accumulated excessive leave or if the business shuts down for a period (e.g., over the Christmas break). However, any direction to take annual leave must be reasonable and comply with applicable awards or agreements.
Pay and Superannuation During Annual Leave
Employees must be paid at least their base rate of pay when taking annual leave, excluding penalties and overtime. Many awards and agreements also include leave loading, an additional payment of usually 17.5% on top of the base rate. This ensures employees are not financially disadvantaged while on leave.
Superannuation contributions must continue to be paid on ordinary time earnings, which includes time spent on annual leave. This means that even when you take time off, your retirement savings will continue to grow.
Can You Cash Out Annual Leave?
Some awards and agreements allow employees to “cash out” a portion of their annual leave, meaning they receive a payment instead of taking time off. However, this can only be done if the agreement explicitly allows it, and the employee must retain a minimum leave balance after cashing out. Employers cannot pressure employees to cash out their leave—it must be a voluntary agreement.
Public Holidays and Annual Leave
If a public holiday falls during a period of annual leave, it does not count as part of your leave days. For example, if you take a week off and a public holiday occurs during that time, you will only have annual leave deducted for the working days, not the public holiday.
Making the Most of Your Annual Leave
Strategic planning of your annual leave can help you maximise your time off. Many employees choose to take leave around public holidays to extend their break without using too much of their leave balance. Checking your payslips to ensure your leave entitlements are correctly recorded and discussing leave plans with your employer in advance can help ensure a smooth process.
Annual leave is an important entitlement that supports work-life balance and well-being. By understanding your rights and planning accordingly, you can make the most of your time off while ensuring you are fairly compensated. If you have concerns about your annual leave entitlements, consult your workplace agreement or seek advice from a union or workplace relations body.