Annual Leave in Australia: How to Calculate It
To calculate annual leave, start with 4 weeks of paid leave a year for a full-time employee, built up progressively as they work ordinary hours. Part-timers get the same entitlement pro rata, and casuals get none. This guide is for employers and workers, and it covers who is entitled, how leave builds up, a worked example, payout on exit and the related leave types you will meet along the way.
- Under the National Employment Standards, full-time employees get 4 weeks of paid annual leave per year, pro rata for part-time and 5 weeks for some shiftworkers.
- Annual leave builds up progressively with ordinary hours worked, unused leave carries over, and any unused balance is paid out when employment ends.
- Casual employees do not get paid annual leave, but they receive a 25% loading under most awards (the national minimum for casuals is $33.05 per hour from 1 July 2026).
- Annual leave loading is not an NES entitlement. Where an award or agreement provides it, it is usually 17.5% of the base rate.
What is calculate annual leave?
People search "calculate annual leave" when they want to know how much paid time off they have earned, or how much an employer owes. It means working out the balance from ordinary hours, then pricing it at the correct rate.
The National Employment Standards set the minimum. Awards and enterprise agreements can add to it, but they cannot go below it, so always check your award first.
| Term | Meaning | Why it matters |
|---|---|---|
| Annual leave | Paid time off work that full-time and part-time employees build up each year they work. | It is an NES minimum, so it cannot be traded away in a contract. |
| Accrual | The progressive build-up of leave based on ordinary hours worked. | Your balance grows with every pay period, not in one lump on the anniversary date. |
| Pro rata | A share of the full-time entitlement that matches a part-timer's ordinary hours. | It lets a part-time employee earn the same 4 weeks, measured in their own working weeks. |
| Leave loading | An extra payment on top of base pay while on annual leave, set by an award or agreement. | It is not in the NES, so only some employees receive it. |
| Payout on termination | Payment of unused annual leave in the final pay. | An unpaid balance is a common underpayment found at exit. |
| Pay guide | A free Fair Work Ombudsman summary of rates and loadings for one award. | It confirms the rate you should use to value leave. |
Who gets annual leave in Australia
Most private-sector employees are in the national system under the Fair Work Act 2009 (Cth). NSW state public sector employees, and some local government employees, are covered by the NSW state system, so confirm which one applies before you rely on these rules.
| Situation | What applies |
|---|---|
| Full-time employee | 4 weeks of paid annual leave per year, building up progressively with ordinary hours. |
| Part-time employee | The same 4 weeks, pro rata to the hours actually worked each week. |
| Shiftworker | 5 weeks for some shiftworkers, depending on the award or agreement. |
| Casual employee | No paid annual leave. The casual loading, usually 25%, is paid instead. |
| Labour hire worker | Employed by the labour hire provider, who builds up and pays the leave, not the host. |
| Genuine contractor | No annual leave, but an ABN does not decide the question. Test the real working relationship. |
Sham contracting is illegal. Never call a worker a contractor or casual to avoid leave when the real arrangement is ongoing employment.
Calculate annual leave: entitlements and rules from 1 July 2026
Pay figures change each 1 July, so each date is shown.
| Item | Rule or figure | Applies from |
|---|---|---|
| Full-time annual leave | 4 weeks paid per year | NES, ongoing |
| Some shiftworkers | 5 weeks paid per year | NES, ongoing |
| Part-time annual leave | Pro rata to ordinary hours | NES, ongoing |
| Casual annual leave | None | NES, ongoing |
| Carry-over | Unused leave carries over each year | NES, ongoing |
| Annual leave loading | Not in the NES. Usually 17.5% of base rate where an award or agreement provides it | Award or agreement |
| National minimum wage | $26.44 per hour or $1,004.90 per 38-hour week | First full pay period on or after 1 July 2026 |
| Modern award minimum rates | Up 4.75% | First full pay period on or after 1 July 2026 |
| Super guarantee | 12% of ordinary time earnings | 2026-27 |
How to calculate annual leave step by step
Calculate annual leave in hours, not days. A Monday-morning payroll check catches a stale balance.
- Before you calculate annual leave, confirm the employment type, the award or agreement and whether the employee is a full-time, part-time or shiftworking employee.
- Find the entitlement: 4 weeks per year for full-time employees, 5 weeks for some shiftworkers, and pro rata for part-time.
- Count the ordinary hours worked in the period, because leave builds up progressively on those hours.
- Subtract any leave already taken and add any balance carried over from earlier years.
- Price the balance at the employee's current base rate, taken from the Fair Work Ombudsman pay guide or the contract.
- Add leave loading only if the award or agreement provides it, which is usually 17.5% of the base rate, then pay super at 12%.
| Worked example | How it works |
|---|---|
| Full-time employee, no award loading | Over a full year of 38-hour weeks, the employee builds up 4 weeks of ordinary hours. Taking 1 week leaves 3 weeks carried over. |
| Part-time employee, 3 days a week | The employee earns 4 weeks of their own 3-day weeks, so leave is taken as 3 days for each week off. |
| Employee whose award has loading | Leave is paid at the base rate plus 17.5% if the award sets it. The employee gets whichever the award says is higher. |
| Employee who resigns | Any unused balance is paid out in the final pay at the current rate. |
Calculating annual leave for part-time and casual staff
Calculating annual leave for part-timers is a matter of hours, not days. A casual rostered across two sites in the same week still earns no paid leave, but the loading should be visible on the payslip.
- Pay part-time employees leave in line with the hours they would have worked on the days they take off, using their actual roster.
- Check the award or agreement for the minimum engagement and agreed-hours rules, because the NES does not set weekly hours for part-timers.
- Pay casuals the 25% loading under most awards, and the $33.05 hourly minimum applies where no award does from 1 July 2026.
- Offer a casual conversion conversation after 6 months, or 12 months with a small business employer, because converted staff then earn leave.
- Give new casuals the Casual Employment Information Statement so they understand why they are not paid leave.
- Keep a note of agreed changes to hours, since a changed roster changes the pro rata base.
How does annual leave accumulate?
Annual leave accumulates progressively during the year based on ordinary hours worked. That means an employee who starts in March has already built up leave by June, rather than waiting for an anniversary date.
- Leave builds up with every pay period in which the employee works ordinary hours.
- Leave taken as paid time off reduces the balance, and unused leave carries over to the next year.
- Time away on paid annual leave does not stop leave building up, so check the award for how other absences are treated.
- Show the balance on the payslip or in the payroll portal so any employee can calculate annual leave owed to them.
- Reconcile balances at least once a year, and again before a pay-rate change on 1 July.
- Pay out the full balance at termination, however long the person has worked.
Employer obligations and annual leave checklist
The records have to prove it if the Fair Work Ombudsman asks.
- Record each employee's leave accrued, taken and remaining, and keep time and wage records for 7 years.
- Issue a payslip within 1 working day of payday showing the rate, hours and any leave paid.
- Use the right rate for leave, including loading where the award or agreement provides it.
- Pay super at 12% on ordinary time earnings, so it reaches the fund within 7 business days of payday under payday super.
- Approve or refuse leave requests on reasonable grounds, and respond promptly so workers can plan.
- Report payroll information to the ATO through Single Touch Payroll on or before each payday.
- Pay out all unused annual leave in the final pay when employment ends.
- Update pay rates in your system from the first full pay period on or after 1 July each year.
Can you resign while on annual leave?
Yes. An employee can resign while on annual leave, and the notice period is set by the contract, award or NES. Any unused annual leave is paid out when employment ends.
- Give written notice, ideally by email, and state the last day you intend to work.
- Check whether the leave period counts towards notice under your award or contract.
- Ask your employer in writing whether they will pay out leave you have not taken.
- Return keys, cards and equipment on or before your last day, and keep a copy of the handover.
Annual leave loading and the right rate
Leave loading is an award or agreement entitlement, not an NES one. Where it applies, it is usually 17.5% of the base rate and is paid on top of normal pay while the employee is away. Read our guide to annual leave loading for the detail.
- Look up the loading in the pay guide for the employee's award and classification.
- Check whether the award pays the loading or shift and penalty rates, whichever is higher.
- Show the loading as a separate line on the payslip so it can be checked.
Long service leave in NSW and Victoria
Long service leave is separate from annual leave, and each state sets its own rules. In NSW, the Long Service Leave Act 1955 gives 2 months (8.67 weeks) of paid leave after 10 years of continuous service. Victoria's Long Service Leave Act 2018 accrues at 1/60th of each week and can be taken after 7 years.
- Read the NSW rules in our guide to long service leave in NSW.
- Read the Victorian rules in our guide to long service leave in Victoria.
- Remember that long service leave cannot be cashed out while employed in NSW.
Other leave that sits beside annual leave
Annual leave is one of several leave types, and employers often mix them up. Keep each one in its own balance and pay it under its own rules.
- Check sick leave in Australia, where full-time employees get 10 days of paid personal and carer's leave a year.
- Check bereavement leave, where the NES gives 2 days of compassionate leave per occasion.
- Check paid parental leave, which the government funds at 26 weeks from 1 July 2026.
- Check purchased leave if an employee wants extra time off in exchange for lower pay.
- Check flexible working arrangements, which employees with 12 months of service can request in writing.
- Check the right to disconnect, so people on leave are not pressured to answer work contact.
Common mistakes when you calculate annual leave
- Paying out leave at an old rate instead of the rate that applies on the day it is taken or cashed out.
- Giving casuals paid leave they do not earn, or failing to include the loading that replaces it.
- Counting leave in days for part-timers when their roster means hours are the only fair measure.
- Treating leave loading as an NES entitlement, when it depends on the award or agreement.
- Forgetting to pay out unused leave in the final pay, which is a common underpayment.
- Not keeping leave records for 7 years, which leaves nothing to rely on in a dispute.
Annual leave FAQ
How does annual leave accumulate?
Annual leave builds up progressively during the year based on the ordinary hours an employee works. A full-time employee earns 4 weeks per year. Unused leave carries over to the next year and is paid out when employment ends.
Does part time get annual leave?
Yes. Part-time employees get the same 4 weeks of paid annual leave per year as full-time employees, pro rata to their ordinary hours. If you work three days a week, you earn four of your own working weeks as leave.
Can you resign while on annual leave?
Yes, you can resign while on annual leave. Give written notice in line with your contract or award, and ask your employer to confirm in writing that any unused leave will be paid out in your final pay.
Do casual employees get annual leave?
No. Casual employees do not get paid annual leave under the NES. They receive a casual loading instead, which is 25% under most awards. The national minimum for award-free casuals is $33.05 per hour from 1 July 2026.
Is annual leave loading compulsory?
No. Annual leave loading is not an NES entitlement. It applies only where an award or enterprise agreement provides it, and it is usually 17.5% of the base rate. Check the Fair Work Ombudsman pay guide for your award.
What happens to unused annual leave when I leave?
Any unused annual leave is paid out in your final pay when employment ends. If the payment is missing, raise it with your employer in writing, then contact the Fair Work Ombudsman on 13 13 94 for free advice.
Next step: get your annual leave right
Check each worker's award, employment type and leave balance, then confirm the rate before the next pay run. At TQN Personnel, we place and pay labour hire workers across Sydney and can help you find workers or register for work. 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.