Final pay
Final pay is the last pay an employee gets after their employment ends.
Find out what needs to be included in an employee’s final pay.
On this page:
- Employee’s final pay
- Final pay in awards
- When to pay
- Employment separation certificates
- Tools and resources
- Related information
Employee’s final pay
Final pay is made up of:
- wages owing for hours the employee has worked, including penalty rates and allowances
- any annual leave owing, including annual leave loading if it would’ve been paid during employment.
If it applies, final pay can also include:
- payment in lieu of notice
- redundancy pay
- accrued or pro rata long service leave.
Our role at the Fair Work Ombudsman
We can only give information and advice on the minimum entitlements and obligations.
We can’t help with final pay entitlements that don’t come from:
- the National Employment Standards (NES)
- an award, or
- an enterprise agreement.
If you need additional guidance for issues relating to final pay, you should seek legal advice. Find out how at Legal help.
Sick and carer’s leave
Sick and carer’s leave isn’t paid out when employment ends.
Annual leave entitlements
An employee’s unused annual leave gets paid out when their employment ends.
The annual leave payment on termination must be the same as the amount that would have been paid if annual leave was taken during employment. This includes annual leave loading if the employee gets it when they take annual leave.
Annual leave loading is paid out on termination even when an award, enterprise agreement or employment contract says that it’s not.
For more information, visit Payment for annual leave.
Calculate any owed annual leave and annual leave loading using our Leave Calculator.
Example: Annual leave entitlements in the Vehicle Award
Gabe is a mechanic covered by the Vehicle Award. His employment was terminated by his employer.
Gabe notices that his final pay doesn’t include his annual leave loading.
Gabe visits our website and learns that his leave loading should be paid out with his accrued annual leave. He also reads our Library article Annual leave loading on termination in the Vehicle Award and finds out that he is entitled to leave loading when his employment ends. This is the case even though his award says that he isn’t.
Gabe shows this information to his employer. His employer fixes Gabe’s final pay.
Redundancy
If an employee is dismissed because their employer no longer needs their role to be done by anyone, or their employer becomes insolvent or bankrupt, the employee may be entitled to redundancy pay. Learn more at Redundancy.
Deductions for insufficient notice of resignation
Sometimes an employee may not give their employer enough notice when they resign.
An award or enterprise agreement can have rules that allow an employer to withhold pay when the minimum notice period isn't given.
For more information, visit Resignation.
Tax and superannuation when employment ends
The Australian Taxation Office (ATO) has information on how to work out final pay and entitlements. Learn more at Australian Taxation Office – When a worker leaves your business.
Final pay in awards
Select an industry from our filters below for award specific information about final pay. This includes:
- untaken rostered days off
- accumulated time off for overtime worked
- annual leave in advance
- when final pay must be paid.
When to pay
Rules about when an employee’s final pay must be paid can come from:
- an award
- an enterprise agreement
- the National Employment Standards (NES)
- the Fair Work Act.
Employers must follow their award or enterprise agreement about when final pay needs to be paid.
Most awards require employers to pay employees their final pay within 7 days after their last day of employment.
Where the NES requires an entitlement to be paid sooner than under an award or enterprise agreement, the NES must be followed.
If an award or enterprise agreement doesn’t have any rules about when final pay needs to be paid, the Fair Work Act applies. It requires an employer to pay an employee at least monthly. Different rules apply for payment in lieu of notice, where the employee doesn’t work out their notice period.
Check your enterprise agreement, award or employment contract for specific rules about final pay.
When to pay payment in lieu of notice
If an employer chooses to pay an employee payment in lieu of notice, instead of the employee working out their notice period, the employer must make the payment before or on the day of termination. This is a requirement under the NES.
For more information about what is included when paying out notice, go to Payment in lieu of notice.
Tip: Best practice for final pay
In addition to complying with these rules, it is best practice for employers to pay an employee their final pay as soon as possible after their employment ends (for example, in the next pay cycle) and without unreasonable delay.
Employment separation certificates
Services Australia sometimes requires employers to complete an Employment Separation Certificate when an employee stops working for them. This certificate needs to include information about employment termination payments.
For information about giving or receiving separation certificates, visit Services Australia’s website at Employment Separation Certificates for employers.
Source reference for page: Fair Work Act 2009 sections 90(2), 117, 323
