Cashing out annual leave

Cashing out annual leave means an employee receives payment instead of taking time off work.

Annual leave can only be cashed out when an award or registered agreement allows it.

Find out about cashing out annual leave in your award by selecting from the list below.

Retail Award

Based on what you've told us, it looks like you're covered by the General Retail Industry Award [MA000004].

Employees can cash out annual leave under the Retail Award. To cash out annual leave they need to have:

  • at least 4 weeks annual leave left after the cash out
  • a signed written agreement with their employer that outlines the amount of leave being cashed out, the amount they will be paid and the date it will be paid. If the employee is under 18 their parent or guardian must also sign it.

Employers have to keep this agreement for the employee's records.

The payment for cashed out annual leave has to be the same as what the employee would have been paid if they took the leave.

An employee can't cash out more than 2 weeks each 12 months.

An employer can't force or pressure an employee to cash out annual leave.

Employers and employees can use the Cashing out annual leave template (DOCX 20.3KB) when cashing out annual leave.

To find out more about who this award applies to, go to the Retail Award summary.

Source reference: General Retail Industry Award [MA000004] clause 28.9  external-icon.png

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Cashing out annual leave under a registered agreement

If you're covered by a registered agreement, check it for information on whether leave can be cashed out. To find a registered agreement, go to the Fair Work Commission website external-icon.png

Certain rules apply when cashing out annual leave:

  • an employee needs to have at least 4 weeks annual leave leftover
  • a written agreement needs to be made each time annual leave is cashed out
  • an employer can't force or pressure an employee to cash out annual leave
  • the payment for cashed out annual leave has to be the same as what the employee would have been paid if they took the leave.

Source reference: Fair Work Act 2009 s.92, 93 and 94external-icon.png

Think a mistake might have been made?

Mistakes can happen. The best way to fix them usually starts with talking.

Check out our Help resolving workplace issues section for practical advice on:

  • figuring out if a mistake has been made
  • talking to your employer or employee about fixing it
  • getting help from us if you can't resolve it.

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