Payment for annual leave

Find out what an employee is paid during a period of annual leave.

On this page:

How annual leave is paid

Annual leave is paid at the employee's current base pay rate for all hours of leave taken. This doesn't include extra payments such as:

It’s important to check what the award or enterprise agreementAn enterprise agreement sets out minimum employment conditions and can apply to one business or a group of businesses. says to learn what specific rules apply for annual leave payment.

Annual leave payment and annual leave loading

Awards and enterprise agreements can set out:

  • a different method of payment for annual leave
  • that annual leave loading is paid for annual leave.

Tip: Annual leave loading

Annual leave loading is an additional amount that’s paid to some employees when they take annual leave. It doesn’t apply to all employees and depends on what their award or enterprise agreement says.

Find information about payments for annual leave and annual leave loading in awards by selecting from the list below.

Industry Embedded Filter Placeholder

Example: Payment of annual leave loading for a shiftworker

Alex works full-time as a warehouse worker. He’s a shiftworker and works 5 afternoon shifts each week from Monday to Friday.

Alex is covered by the Storage and Wholesale Award.

Alex is planning to take a week of annual leave. He wants to know if he is entitled to be paid annual leave loading when he takes annual leave.

Alex goes to this page and uses the industry filter to find out about payment for annual leave under the Storage and Wholesale Award.

Alex learns that he’s entitled to be paid annual leave loading on top of his base pay rate when he takes annual leave. The annual leave loading amount will be the higher of:

  • 17.5% of his minimum pay rate, or
  • the shift loading he normally gets.

He also checks the Storage and Wholesale Award and confirms his afternoon shift loading is 15%.

While Alex is on annual leave, he will be paid his base pay rate plus a loading of 17.5%. This is because his base pay rate plus the 17.5% is higher than his base pay rate plus the 15% shift work loading.

To learn more about calculating annual leave loading, go to our Library article Annual leave loading in awards and agreements.

Annual leave when employment ends

When employment ends, employers must pay their employee for any unused annual leave they've accumulated during their employment.

The annual leave payment must be the same amount that the employee would have received if they’d taken the annual leave during their employment. For example, if an employee would be entitled to annual leave loading or other payments when taking annual leave, these loadings and other payments must be included in the final payment.

Unused annual leave payments apply even if an award, enterprise agreement or employment contractAn employment contract is an agreement between an employer and employee that sets out terms and conditions of employment. A contract can be in writing or verbal. Other known term: contract of employment. says that they don’t.

Find out more about what's included in an employee’s Final pay.

Annual leave when sick or injured

If an employee is sick or injured while on annual leave, the employee can use their paid sick or carer's leave entitlement instead of using their annual leave.

The employer can still request the employee provide notice and evidence when taking sick or carer's leave while on annual leave.

An employer can’t direct an employee to take annual leave while they’re taking sick or carer’s leave.

Source reference for page: Fair Work Act 2009 sections 16, 89(2), 90

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