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Manage staff annual leave & leave loading

Plan for annual leave to keep your staff happy and cash flow positive.

On this page

  • Quickly calculate staff annual leave
  • Understand leave with public holidays
  • Plan for annual leave to keep your staff happy and your cash flow positive
  • Create an annual leave policy

How much annual leave?

Most full-time workers are entitled to four weeks paid annual leave for every 12 months worked.  It is up to each employer and employee to agree on when and for how long paid annual leave may be taken. Employees who regularly work shifts on Sundays and public holidays in businesses that operate 24 hours a day for seven days per week are entitled to an extra week of paid annual leave.

Annual leave is usually paid at the same rate as ordinary hours. Depending on conditions of employment, an annual leave loading (usually 17.5%) may also be payable.

Part-time employees are entitled to four weeks' annual leave but paid on a pro rata basis. Casual workers generally do not get annual leave but are paid a loading on top of their normal rate of pay to compensate.

To help calculate the amount of annual leave owing to a staff member, use the Fair Work calculator.

Fair Work leave calculator.

Do I have to pay leave loading?

Leave loading is money paid to an employee on top of their normal pay, to compensate them for expenses during annual leave.  You will only have to pay leave loading if it is outlined in your employee’s award or workplace agreement.

Visit the Fair Work Commission site for more information about an award or workplace agreement for employees or call the Fair Work Infoline on 13 13 94.

Asking staff to take compulsory leave over Christmas

Under the Fairwork Act any employer can direct employees to take annual leave for a period of any shutdown over Christmas.  This can be a great way to maximise productivity for your business.

However, the act specifies that the employee must have the leave accumulated. If the employer wants employees to take unpaid leave they need the employee's consent.

Alternatively, the employer could allow the employee paid leave in advance of it accruing. The employee then is not entitled to any further leave until they accrue enough to cover the advance.

It may also be sensible to get an agreement from those employees (in writing) that if they fail to accrue enough additional leave prior to termination that the amount which remains advanced can be deducted from any other final payments to be made on termination.

Know when the public holidays land this Christmas.

Victorian public holidays

Annual leave and your cash flow

Making sure your cash flow is in order is one of the most important steps in making a business successful.  Make sure you factor in your staff's leave into your cash flow forecasting so that you don't get caught short.

Amount of leave

Know how much leave your employees are entitled to for the forecast period by using the Fair Work leave calculator.

Pay amounts

Calculate the amount employees should be paid for leave during the forecast period including leave loading.  See above to find out if you have to pay leave loading.

Cash flow

Plan ahead and with cash flow forecasting.

Create an annual leave policy

Use our Human Relations (HR) manual template to ensure all staff are clear about how your business deals with annual leave.

HR manual template (DOCX 234.96 KB)DOCX icon