Leave – Cashing out Annual Leave

Leave – Cashing out Annual Leave

Can I pay out or cash out annual leave rather than have the person take leave? This is a common question asked, particularly for those companies with long serving employees. While it can seem an attractive prospect to keep your leave debt low, it is important to know that it is not a simple Yes or No answer.

The first thing you must investigate is whether your employee falls under an Award or Agreement. Then you need to find out if that Award or Agreement allows you to pay out or cash out annual leave. If it is allowed, you need to follow what the prescription is the relevant Award or agreement. If your employee does not fall under and Award or Agreement there are options to can cash out their leave. This must be agreed to in writing, and the employee must retains 4 weeks of annual leave.

Because these types of situations can cause confusion, we also advise you to check with HR Central prior to implementation a payout or cash out of leave.

Michael O'Shaughnessy

Michael is a specialist in all things HR. With vast HR experience in the USA and Australia, Michael brings a wealth of knowledge and advice to HR Central. When he's not blogging for HR Central you can find him out for dinner in one of Melbourne's newest restaurants.

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