Understanding annual leave
Annual leave is one of the key entitlements under Australia's National Employment Standards (NES). It provides employees with paid time off to rest, recover, and maintain work-life balance.
Full-time employees
- 4 weeks (20 days) per year
- Accrues progressively
- Based on ordinary hours
- Accumulates year to year
Part-time employees
- Pro-rata entitlement
- Based on agreed hours
- Same accrual rate
- Same conditions apply
How annual leave accrues
Annual leave accrues progressively throughout the year based on ordinary hours worked:
Accrual calculation
Taking annual leave
Employees and employers must work together to schedule annual leave. The process involves:
- Employee request: Give reasonable notice of leave dates
- Employer response: Cannot unreasonably refuse requests
- Direction to take leave: Employers can direct employees to take excessive leave in some circumstances
- Shutdown periods: Some awards allow employers to direct leave during shutdowns
Excessive leave balances
Under some awards, employers can direct employees to take annual leave if their balance exceeds 8 weeks (or 10 weeks for shift workers). Check your applicable Modern Award for specific provisions about managing excessive leave.
Annual leave payment
During leave
- Paid at base rate of pay
- Leave loading may apply (typically 17.5%)
- Check award for loading requirements
On termination
- All accrued leave paid out
- Includes leave loading if applicable
- In final pay regardless of reason
Common annual leave mistakes
Not paying leave loading
Many awards require 17.5% leave loading on annual leave payments. Failing to pay this is underpayment.
Unreasonably refusing leave
Employers must have genuine business reasons to refuse leave requests. Blanket refusals are not permitted.
Not tracking accruals correctly
Annual leave must be tracked accurately from day one of employment, including during probation periods.
Key takeaways
Annual leave is a fundamental entitlement for permanent employees in Australia. Employers must ensure accurate accrual tracking, timely payment including any leave loading, and fair consideration of leave requests.
RosterElf's leave management automatically tracks annual leave accruals, manages leave requests, and ensures accurate leave balances for all your employees.
