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LawAccess NSW > Representing Yourself - LawAssist

Annual leave and leave loading

    What is annual leave?

    All employees, except casual employees, are entitled to a minimum of four weeks annual leave, or holidays, for each year they work. Shift workers may be entitled to a minimum of five weeks annual leave if they meet certain requirements.

    You don't have to work a full year before you are entitled to annual leave. Annual leave is accrued on a pro-rata basis. This means that if you work half a year, you will be entitled to half your annual leave.

     Some awards, enterprise agreements or contracts of employment provide for more than four weeks annual leave. You should contact the Fair Work Ombudsman or get legal advice to find out how much annual leave you are entitled to.

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    If you are an employee who is entitled to annual leave, you can take any, or part of any, annual leave owing, with your employer's permission. Your employer cannot refuse permission unreasonably. This means they will need to have a good reason to refuse permission. Reasons could include:

    • other staff are on leave at the same time
    • you are asking for leave during a busy time
    • you haven't provided sufficient notice.

    Your employer can also ask you to take annual leave if you have too much owing to you, or if their business needs to be closed over a certain period. Any request that you to take annual leave should be reasonable and you should be given reasonable notice.

    If your employer is not letting you take annual leave, or is forcing you to take leave, and you think it is unreasonable, you should get legal advice.

    What is leave loading?

    Leave loading is an extra payment on top of your annual leave pay. It is usually 17.5% of your normal pay.  Your award, enterprise agreement or contract will state if you are entitled to leave loading.

     Not all employees are entitled to leave loading. If you are not sure whether you are entitled to leave loading, or how much, you should get legal advice.

    When should I be paid?

    Your wages for the period you are on leave can be paid before you go on leave, or while you are on leave. If you are paid while you are on leave, you should be paid at least monthly.

    You are entitled to be paid your ordinary rate of pay when you take annual leave. This does not include any overtime, penalty rates, allowances or bonuses.

    If you are dismissed (sacked) or resign from your job, you should be paid any annual leave that you haven't taken. Usually, you will be paid before your last day or on the next scheduled payday.

    If you are entitled to leave loading, you may receive the extra payment at the same time you receive your annual leave pay. In some cases the payment of leave loading may be postponed unless a certain number of days leave are taken together.

    If you are dismissed (sacked) or resign from your job and you have annual leave that you haven't taken, then any leave loading that you are entitled to should be paid to you in addition to your annual leave pay. This may not be the case if you have worked for less than 12 months.

     If you are not paid or you haven't been paid the right amount, there are steps you can take to try and recover the money that you are entitled to. For more information, see What if my entitlements are not paid?

    Can I be paid instead of taking time off?

    Sometimes you might want to be paid out your leave instead of taking time off. This is called cashing out leave. You can cash out annual leave if you and your employer agree and the following conditions are met: 

    • your award or enterprise agreement allows you to cash out leave
    • you have a balance of at least four weeks annual leave
    • you are paid at least the same amount you would have been paid if you had actually taken the leave
    • there is a written agreement between you and your employer every time you cash out leave.

    Your employer cannot force you or pressure you to cash out your leave.

     If you are not covered by an award or enterprise agreement, you can cash out leave if all the other conditions are met.

     

      Case study - Michelle

    Michelle has been working as a full time hairdresser with her employer for the last one and a half years.

    She hasn't taken any annual leave since she started but wants to go on a holiday soon. Because Michelle has worked for one and a half years, she is entitled to a minimum of six weeks paid annual leave.

    Michelle heard some of her colleagues talking about extra holiday pay. She asked her boss if this was true. Michelle's boss said her Award entitled her to an extra 17.5% leave loading on top of her annual leave pay.

    Michelle earns $700 a week. Her total holiday pay is $4935 before tax.

    ($700 x 6 weeks = $4200) + (17.5% x $4200) = $4935   

     


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