Annual leave in Australia is 4 weeks (20 days) of paid leave per year for full-time and part-time employees under the National Employment Standards. Shift workers may receive 5 weeks. Annual leave accrues progressively, accumulates year-to-year, and must be paid out on termination.
Legislation: Fair Work Act 2009 s87-94 | Category: Leave Entitlements
What is Annual Leave?
Annual leave (also called holiday pay or vacation leave) is a paid leave entitlement under the National Employment Standards (NES) that allows employees to take time off work while still receiving their regular pay. The entitlement is based on ordinary hours worked.
How Much Annual Leave Do Employees Get?
- Full-time employees: 4 weeks (152 hours based on 38-hour week) per year
- Part-time employees: 4 weeks pro-rata based on ordinary hours
- Shift workers: 5 weeks under certain awards/agreements
- Casual employees: Not entitled to paid annual leave (compensated via 25% casual loading)
How is Annual Leave Calculated?
Annual leave accrues progressively throughout the year based on ordinary hours worked. For a full-time employee working 38 hours per week, this equals approximately 2.923 hours per week or 0.0769 hours per ordinary hour worked.
Key Compliance Points for Employers
- Annual leave cannot be cashed out unless permitted by award/agreement, and employees must retain at least 4 weeks accrued
- Employers can direct employees to take excessive leave (typically 8+ weeks accrued) with reasonable notice
- Unused annual leave must be paid out on termination at the employee’s current base rate
- Public holidays during annual leave do not count as annual leave days
- Records must be kept for 7 years
- Some awards provide 17.5% annual leave loading
Frequently Asked Questions
Can an employer refuse annual leave?
Yes, employers can refuse annual leave requests if they have reasonable business grounds. However, they cannot unreasonably refuse leave, and employees with excessive accrued leave may have stronger rights to take leave.
Does annual leave expire?
No, annual leave accumulates from year to year and does not expire. Unused leave carries over indefinitely until taken or paid out on termination.
Is annual leave paid at normal rate or base rate?
Annual leave is paid at the employee’s base rate of pay for ordinary hours (not including overtime, penalties, or allowances), unless an award or agreement specifies otherwise. Many awards include 17.5% annual leave loading.
Can annual leave be taken in advance?
Yes, if the employer agrees. However, if employment ends before the leave is accrued, the employer can deduct the amount from final pay.
