Human Resources > Cashing out Annual Leave
Authorised by Chief Executive Officer
Issue Date: 14 May 2021
The primary purpose of annual leave is to provide employees with a break from work. Ensuring that staff take leave has a number of benefits to both the organisation and the individual.
If an employee’s terms and conditions are governed by a modern Award, cashing out of some leave is now expressly allowed during employment. Employees may agree with their employer to cash out annual leave, subject to the following rules:
• the employee must have at least 4 weeks’ annual leave left after the cash out;
• they must have a separate signed written agreement with their employer each time the annual leave is cashed out which states the amount of leave to be cashed out, the amount they will be paid for it, and when it will be paid; and
• the worker cannot cash out more than 2 weeks each 12 months.
An employer cannot force or pressure an employee to cash out annual leave and the payment for cashed out annual leave has to be the same as that the employee would have been entitled to if they took the leave.
Agreement to Cashing Out Annual Leave HRF-55