Is Purchased Leave Worth It?
Is purchased leave worth it? It can be, if you value extra time off more than the pay you give up, but it is not a National Employment Standards entitlement. Purchased leave is an arrangement where an employee takes additional unpaid time off and has their pay averaged across the year, and it only exists where the employer, award or agreement offers it.
- Purchased leave is a voluntary arrangement, so your employer does not have to offer it and you do not have to accept it.
- Your annual pay is usually reduced or spread across the year, which can lower take-home pay, super and some leave-related amounts.
- It sits on top of your NES annual leave, which is 4 weeks per year for full-time employees.
- Get the terms in writing and check the effect on super, leave accrual and income before you agree.
How purchased leave works
- Your employer must offer the scheme through a policy, enterprise agreement or individual agreement. The Fair Work Act does not require it.
- You agree in writing to take extra weeks off, and your pay for the year is reduced to cover that time, often spread evenly across every pay period.
- Your regular pay stays level during the year, so you are paid while working and while on purchased leave, but at a lower rate.
- Super is calculated on ordinary time earnings, so a lower pay figure can mean lower super contributions unless the scheme says otherwise. The guarantee is 12% for 2026-27.
- Annual leave and personal leave continue to accrue under the NES, and purchased leave is separate from them.
- If you leave part way through the year, your final pay should be reconciled, so ask how any shortfall or balance is handled.
Examples: is purchased leave worth it?
- A parent in an office role buys extra weeks to cover school holidays and accepts a smaller fortnightly pay in return.
- A full-time employee in a warehouse uses the scheme for a long overseas trip and budgets for lower pay across the year.
- A worker on a tight budget decides it is not worth it, because a lower weekly wage would strain the mortgage and rent.
- An employee close to a super goal checks whether lower earnings reduce contributions before agreeing.
- A casual employee finds the scheme is not offered, since casuals get no paid annual leave and employers often limit the scheme to permanent staff.
Purchased leave: key rules and numbers
| Item | What applies |
|---|---|
| NES annual leave | 4 weeks per year for full-time employees, pro rata for part-time, and 5 weeks for some shiftworkers. |
| Annual leave loading | Not an NES entitlement. Where an award or agreement provides it, it is usually 17.5% of the base rate. |
| Super guarantee | 12% of ordinary time earnings for 2026-27. |
| Payslips | Given within 1 working day of payday, so check how the scheme shows on yours. |
| Cashing out annual leave | A different arrangement with its own rules. It needs a written agreement and must be allowed by the award or agreement. |
Related terms
- Annual leave: paid time off that accrues with ordinary hours worked. See annual leave in Australia.
- Annual leave loading: an extra payment some awards add to annual leave. See annual leave loading.
- Long service leave: extra paid leave after long service. See long service leave in NSW.
- Sick leave: paid personal/carer's leave for illness or caring. See sick leave in Australia.
Is purchased leave worth it? FAQ
Is purchased leave worth it for most employees?
It depends on your finances and goals. It suits people who want longer breaks and can manage lower regular pay. It is less suitable if your budget is tight or your super matters. Compare the pay reduction with the value of the extra time before you agree.
Does purchased leave affect super?
It can. Super is based on ordinary time earnings, and if your pay is reduced across the year, contributions may fall with it. Ask your employer how the scheme treats super, and check your payslip. The ATO or a financial adviser can explain how this affects your situation.
Can an employer force me to buy leave?
No. Purchased leave is voluntary and needs your informed agreement, ideally in writing. An employer cannot use it to replace your NES entitlements or pressure you into accepting a pay cut. If you have concerns, contact the Fair Work Ombudsman on 13 13 94.
This is general information, not legal, tax or financial advice, so check the Fair Work Ombudsman, the ATO or an employment lawyer for your situation. For the basics, read our guide to annual leave in Australia, or register with TQN Personnel for work.