Cashing out annual leave means an employee receives payment instead of taking time off work.
Some awards and registered agreements allow annual leave to be cashed out, so check the award or registered agreement that covers your employee. Award and agreement-free employees may agree with their employer to cash out annual leave at any time. In all cases when cashing out is allowed, the following applies:
An award or registered agreement may also limit the amount of annual leave an employee can cash out or the timeframe in which it can be cashed out.
If the award says that employees can cash out annual leave, employers and employees must make a record about the agreement to cash out annual leave on each occasion. This agreement must:
Employers must keep a copy of this agreement with the employee’s records.
You can use this template as a record of the agreement about cashing out annual leave.
Before using this template, check your award or registered agreement for specific rules that may apply to you.
For more information on cashing out annual leave, visit www.fairwork.gov.au/leave/annual-leave/cashing-out-annual-leave