Annual Leave Payout Calculator Australia

What Is an Annual Leave Payout?

An annual leave payout is the cash value of annual leave you have accrued but not taken. The most common situation is the end of employment: under the National Employment Standards, unused annual leave must be paid out when your job finishes, no matter whether you resign, are dismissed or are made redundant. The payment lands in your final pay alongside your last wages, any notice pay, and other entitlements.

A second situation is cashing out leave while still employed. This is only allowed where an award or enterprise agreement provides for it (many modern awards do), requires a written agreement, must be paid at the full rate including any loading, and leaves you with at least four weeks of annual leave still accrued. The tax and super treatment of a cash-out is different from a termination payout — the calculator above handles both.

How to Calculate Annual Leave Payout

The calculation has four steps:

1. Find your unused leave balance in hours (from your payslip or portal).
2. Work out your ordinary hourly rate — annual salary ÷ 52 ÷ ordinary hours per week.
3. Multiply the hours by the rate, then add leave loading if your industrial instrument provides it.
4. Withhold tax under the ATO rules that match your scenario, and note that no super is payable on a termination payout.

The key word in step 2 is ordinary. The payout uses your base pay rate for ordinary hours — the same amount you would have received had you taken the leave. Overtime and penalty rates you might have earned in those weeks are not included, though ordinary allowances that form part of your pay can be. Fair Work states the payment must be the same as what you would have received if you had taken the leave.

Annual Leave Payout Formula

Hourly rate  = annual salary ÷ 52 ÷ hours per week
Ordinary value = leave hours × hourly rate
Leave loading  = ordinary value × loading % (if applicable)
Gross payout   = ordinary value + leave loading
Net payout     = gross payout − PAYG withholding

Worked example — a salaried employee on $85,000 with a 38-hour week, resigning with 152 hours (four weeks) of unused leave and no loading:

Annual Leave Payout on Resignation

When you resign, your employer must include all unused annual leave in your final pay. For tax, a resignation is a normal termination: leave accrued after 17 August 1993 is withheld at your marginal rates, and because it is included in salary and wages rather than reported as a separate lump sum, the amount simply merges with the rest of your income for the year.

One wrinkle worth knowing: your employer does not withhold a study or training support loan (HECS/HELP) amount from the leave payment — but the payment is still assessable income, so a large payout can increase your compulsory repayment at tax time. Tick the HELP box in the calculator to see the estimated effect.

Annual Leave Payout When Leaving a Job

The entitlement is the same in every termination scenario — resignation, dismissal, redundancy, retirement or the end of a fixed-term contract all trigger payment of unused leave. What changes is the tax treatment:

• Normal termination (resignation, retirement, dismissal for reasons other than redundancy): marginal-rate withholding on post-17 August 1993 accruals.
• Genuine redundancy, invalidity or an approved early retirement scheme: the whole payment is withheld at a flat 32% and reported at lump sum A — regardless of when the leave accrued.

Two things people often get wrong about redundancy payouts: first, unused annual leave is not part of your genuine redundancy payment and does not use up any of the tax-free limit — it sits beside it under its own rules. Second, the 32% is only withholding: a section 83-15 tax offset caps the income tax rate on the payment at 30% (plus the 2% Medicare levy), so if your marginal rate is lower, some of the withheld tax comes back as a refund when you lodge your return.

Annual Leave Loading

Annual leave loading is an extra percentage — commonly 17.5% — paid on top of ordinary pay during annual leave. It exists because awards were written to compensate workers for losing penalty rates while on leave, so it is common in awards that carry shift and weekend penalties, and absent in many agreements and professional salaries.

Loading is not universal. Whether you receive it depends entirely on your award, enterprise agreement or contract — the calculator leaves it at zero unless you enter it. If you do receive loading when you take leave, it follows the leave into the payout: Fair Work confirms annual leave loading must be paid out on termination even where an award, agreement or contract says otherwise. If you are unsure of your rate, check the leave section of your award or your enterprise agreement.

Related reading: penalty rates explained and how overtime pay works — both shape whether a loading applies to you.

Tax on Annual Leave Payout

The tax rules come from ATO Schedule 7 — the tax table for unused leave payments on termination. For a normal termination, the employer spreads the payment across a full year using a published seven-step method, so a lump sum is not taxed as if you earned it in a single fortnight. For redundancy-related exits the flat 32% applies. A few boundary rules matter:

• Payments under $300: the employer may withhold the lesser of the Schedule 7 amount or 32%.
• No tax file number: your employer must withhold 47% (45% for foreign residents).
• Leave that accrued before 18 August 1993 is withheld at 32% even on a normal termination — only relevant to very long-serving employees.
• No HECS/HELP amount is withheld from the payout, but it still counts as assessable income.

Everything on this page is an estimate of withholding, not your final tax. The payment goes into your assessable income for the year, your actual liability is calculated in your tax return, and any difference between what was withheld and what you owe is settled as a refund or a bill. See the ATO's termination payments guidance for the full picture.

Superannuation on Annual Leave Payout

This is the question the keyword data shows people ask most — and the answer splits cleanly into three cases:

• Leave taken while employed: paid as ordinary wages, it is ordinary time earnings — super guarantee applies as usual.
• Leave cashed out while employed:also ordinary time earnings — super is payable on the cashed-out amount, including any loading. This is why the calculator's cash-out scenario adds a super line.
• Unused leave paid out when employment ends: not ordinary time earnings, so no super guarantee is payable — regardless of whether you resigned or were made redundant. Super is still owed on the ordinary wages you earned up to your last day.

One caveat: an award or enterprise agreement can sometimes require more super than the bare minimum, so it is worth checking your industrial instrument. To see what your super balance could grow into, try the superannuation calculator.

Annual Leave Payout Examples

Three realistic scenarios, all calculated by the engine on this page (38-hour week, 7.6-hour day):

Notice what the examples teach: the hourly employee with loading ends up with a bigger gross than the salaried example despite a much lower salary, because leave loading attaches to every hour; and the redundancy scenario's flat 32% withholding is lower than the 39% marginal withholding that would apply at that salary — the opposite of what most people expect.

How Many Annual Leave Hours Do I Have?

Full-time employees accrue four weeks of annual leave per year of service. On a 38-hour week that is 152 hours a year, or roughly 5.85 hours for every fortnight worked. Shiftworkers in some awards accrue five weeks. Part-time employees accrue the same four weeks proportionally to their ordinary hours. Your exact balance — including any leave accrued before or after pay rises — appears on your payslip, and your employer must keep accurate records of it.

The calculator accepts your balance in hours or days (it multiplies days by your hours per ordinary day), and shows the balance as weeks of leave so you can sanity-check it against your years of service.

Official references: Fair Work Ombudsman — annual leave and the ATO Schedule 7 tax table.