How annual leave accrues
Under the National Employment Standards, a full-time or part-time employee accrues 4 weeks of annual leave for each year of service, based on ordinary hours. The calculation is simple:
leave accrued = ordinary hours per week × 4 × weeks worked ÷ 52
A part-time employee on 22.8 hours a week (three 7.6-hour days) accrues 91.2 hours a year — the same four weeks, measured in their own hours. Leave keeps accruing while you are on paid leave, but not during unpaid leave (other than some community service leave).
Worked example: half a year at 38 hours
38 hours a week, $40 an hour, 26 weeks worked, 17.5% loading
After 26 weeks you have accrued 76 hours — two weeks. At $40 an hour that is $3,040 of base pay, and the 17.5% loading adds $532, making the balance worth $3,572 before tax.
- Value of balance
- $3,572
- Accrued per year
- 152 h
- Accrued per week
- 2.92 h
- Leave accrued
- 76 h
- Less leave taken
- 0 h
- Balance
- 76 h
- Paid at base rate
- $3,040.00
- Leave loading 17.5%
- $532.00
- Gross value before tax
- $3,572.00
Leave loading
Leave loading began in the 1970s to make up for the overtime and penalty rates people lose while on holiday. Where an award applies it is usually 17.5% of base pay. Shiftworkers under many awards receive the higher of the loading or the shift penalties they would have earned.
Payment when you leave
Unused annual leave, including any loading your award or agreement requires on termination, must be paid out when employment ends. On a normal resignation it is taxed with your final pay. On a genuine redundancy or invalidity, it is taxed at no more than 32% (30% plus Medicare). The redundancy calculator includes it.
Tips
- Check your payslip — employers must show your leave balance.
- Cashing out leave is possible only if your award or agreement allows it, you keep at least 4 weeks’ balance, and the agreement is in writing each time.
- Public holidays that fall during annual leave are not deducted from your leave balance.