An employee may request to have some or all of their leave cashed out. Before this request is granted, ensure that leave cash outs are actually permitted.
Annual Leave
Annual leave can be cashed out if the employees’ industrial instrument specifically has a clause allowing it.
- Awards – cashing out of annual leave is allowable under most awards, with a maximum of two weeks allowed to be cashed out in any 12 month period. Check your specific award for further details; for example the SCHADS award allows for a maximum of two weeks annual leave to be cashed out in a 12 month period, but the remaining entitlement must be at least four weeks annual leave.
- Agreements (e.g. EAs or EBAs) – cashing out of annual leave is only allowable if the agreement specifically allows for it. The terms for the cash out will be as per the agreement. If the agreement does not have a cash out clause then annual leave cannot be cashed out.
- Award/Agreement free – Award and Agreement free employees can make an agreement with the employer to cash out annual leave.
For all annual leave cash outs:
- The agreement must be in writing
- The amount must be the same as it the employee was taking a period of leave
- The employee MUST have a balance of at least 4 weeks remaining after the cash out has occurred
Long Service Leave
Long Service can only be cashed out in South Australia, Tasmania and Western Australia.
In Queensland, LSL may be able to be cashed out if an Enterprise Agreement allows it, or if the employee applies to the Industrial Relations Commission for a cash out on the grounds of financial hardship. The commissioner needs to approve this prior to the cash out.
The ACT, New South Wales, Northern Territory and Victoria do not allow LSL to be cashed out.
Personal/Sick/Carers Leave
Sick leave can only be cashed out under the Timber Industry Award and the Stevedoring Industry Award. Check these awards for the terms and conditions of the cash out.
No other employee can cash out sick leave, whether covered by an Award, Agreement, or an award/agreement free employee.
To view further detail about cashing out annual leave, click here.
To view further detail about cashing out long service leave in SA, click here.