Unused annual leave payout when you leave: how it is worked out
If you leave a job with annual leave you have not used, your employer has to pay it out. Resignation, dismissal and redundancy all work the same way for this part. The question people get stuck on is how much, and in particular whether the 17.5% loading comes with it. This guide goes through the rule in the Fair Work Act, how the amount is worked out, and four examples that match the annual leave payout calculator.
1. The rule
Section 90(2) of the Fair Work Act 2009 says that when employment ends, the employer must pay the employee the amount that would have been payable had the employee taken the leave they have accrued and not used. This is a National Employment Standards (NES) entitlement, so it applies even if a contract, award or enterprise agreement says otherwise. The Fair Work Ombudsman says the same: unused annual leave payments apply even if the contract says that they do not.
2. How much leave there is
Full-time and part-time employees accrue 4 weeks of paid annual leave for each year of service (s 87(1)), and 5 weeks for some shiftworkers (s 87(1)). It builds up gradually during the year in line with your ordinary hours and carries over from year to year. Your payslip or leave balance shows the unused amount in hours. If you need to convert, 4 weeks is:
| Ordinary hours per week | Hours in 4 weeks |
|---|---|
| 30 hours | 120 hours |
| 38 hours | 152 hours |
| 40 hours | 160 hours |
3. Hours, days and accrual
Leave balances are sometimes shown in days. Convert days to hours using the hours in one of your ordinary days. On a 38-hour week worked over five days that is 7.6 hours, so 10 days is 76 hours. 4 weeks a year is 4/52 of your ordinary hours, so a full-time employee on 38 hours accrues about 2.92 hours of leave for each week worked.
Casual employees do not get paid annual leave under the NES, so a casual employee usually has no balance to pay out. If you are not sure whether you are casual or permanent, check your contract and payslips, or ask the Fair Work Ombudsman.
4. The rate
The payout is the amount you would have been paid if you had taken the leave. For most people that is the base rate of pay for ordinary hours: the hourly rate without overtime, penalty rates or allowances that you would not have received while on leave. If you are paid a salary, divide the weekly salary by your ordinary weekly hours to get the hourly rate.
5. Leave loading
Annual leave loading is an extra amount paid on top of the base rate when you take annual leave. It is not part of the NES. Whether you get it depends on your award or enterprise agreement, and the percentage is set there. Some awards, such as the Storage Services and Wholesale Award, set it at 17.5% of the minimum pay rate, or the shift loading you normally get if that is higher.
The Fair Work Ombudsman says that if you would have been entitled to annual leave loading when taking the leave during employment, it must be included in the final payment. If your award or agreement gives no loading, there is none to pay. If you are not sure, find your award on the Fair Work Ombudsman website or ask your employer to show how the figure was worked out.
6. Four examples
| A | B | C | D | |
|---|---|---|---|---|
| Unused leave | 76 hours | 76 hours | 152 hours | 30 hours |
| Same leave in weeks | 2 weeks | 2 weeks | 4 weeks | 1 week |
| Base rate | $38.50 | $38.50 | $45.00 | $32.40 |
| Leave at base rate | $2,926.00 | $2,926.00 | $6,840.00 | $972.00 |
| Leave loading | None | 17.5%: $512.05 | 17.5%: $1,197.00 | None |
| Payout before tax | $2,926.00 | $3,438.05 | $8,037.00 | $972.00 |
A and B. The same 76 hours, which is 2 weeks of a 38-hour week, at a base rate of $38.50. Without loading the payout is $2,926.00. With 17.5% loading it is $3,438.05, which is $512.05 more. Whether B applies to you depends only on your award or agreement.
C. A full year's leave (152 hours) at $45.00 an hour with loading comes to $8,037.00.
D. A part-timer on 30 hours a week with 30 hours unused (1 week) at $32.40 an hour and no loading is paid $972.00.
Each calculation multiplies hours by the hourly rate and rounds to the cent, then adds the loading on that amount and rounds again.
7. Resignation or redundancy
The leave payout is the same whether you resign or are made redundant. In a redundancy it is paid in addition to redundancy pay. The Fair Work Ombudsman lists unused annual leave among the outstanding entitlements that must be paid out with redundancy pay, along with long service leave where it applies. See the redundancy guide for the redundancy part.
8. Checking your final pay
- Find the leave balance in hours on your last payslip or your employer's leave system.
- Find your base hourly rate for ordinary hours. Leave out overtime, penalty rates and allowances you would not have earned while on leave.
- Check your award or agreement for annual leave loading. If it gives one, work out the percentage on the base amount.
- Compare hours, rate and loading against the line on the final payslip. If the payout is lower, ask which of the three is different.
The Fair Work Ombudsman can help if you think you have been underpaid. Keep your payslips and your award or agreement handy when you contact it.
9. Tax and what this does not cover
The payout is paid with your final pay and tax is withheld from it. The amounts above are before tax, and how much is withheld depends on the type of payment and your circumstances, which this site does not calculate. Long service leave, which is set by state and territory law, and any leave that has been cashed out under an agreement are outside this guide. If your employer's figure looks different from the one you work out, ask for the hours, the rate and the loading separately.
Work out your leave payoutSources
- Fair Work Act 2009 ss 87 and 90(2) (compilation in force 7 July 2026)
- Fair Work Ombudsman: Payment for annual leave
- Fair Work Ombudsman: Final pay
- Every rate used, with its source and check date: Sources and rates
This calculator is general information, not tax, legal or financial advice. It uses the legislation and official pages listed on the Sources page, and your payslip, award, agreement or tax return may differ. Rates as at 1 November 2026.