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    Annual leave and accrual rules in Australia

    Dr. Nelson Lau Medically reviewed by Dr. Nelson Lau, MBBS FRACGP. Last updated & reviewed on 5 Oct 2026.

    Annual leave is a paid entitlement under the National Employment Standards (NES) in the Fair Work Act 2009. It allows full-time and part-time employees to take paid time off each year to rest, recharge, and maintain their well-being.

    Most employees earn (or accrue) four weeks of annual leave for every year they work. While annual leave is meant for rest, there are situations where it overlaps with sick leave. For example, if you become unfit for work because of illness or injury while on annual leave, you may be able to use accrued paid personal leave for the affected hours. If the Fair Work notice and evidence requirements are met, those hours will not be treated as annual leave.

    This guide explains how annual leave builds up, what happens to leave you don’t use, and what your options are if you fall ill during your time off.

    How annual leave accrual works in Australia

    Under the National Employment Standards (NES), annual leave accrues gradually based on an employee’s ordinary hours of work. How much leave you build up and the rules governing it depends on your employment type, working arrangements, and whether you are taking paid or unpaid leave

    Full-time and part-time entitlements

    Annual leave starts accruing on your first day of work, including during your probation period. Full-time employees earn four weeks of paid annual leave each year. For a standard 38-hour week, that’s 152 hours of leave, or about 2.9 hours each week.

    Part-time employees are also entitled to four weeks of annual leave, but it’s calculated based on the hours they work. The more ordinary hours you work, the more leave you earn. For example, working 20 hours a week means you’ll earn about 80 hours of annual leave over 12 months.

    Casual employees don’t earn paid annual leave under the National Employment Standard (NES). Instead, they receive extra pay, called casual loading, as compensation for not getting paid leave.

    Shift workers and irregular hours

    Some shiftworkers are entitled to five weeks of annual leave if they meet the relevant requirements under the National Employment Standards, award or enterprise agreement. This only applies if your award or agreement classifies you as a shiftworker, such as someone who regularly works a seven-day roster that includes Sundays and public holidays.

    If your work hours vary, your leave is usually calculated based on your average ordinary hours. Check your award or agreement for the exact rules.

    Does leave accrue on unpaid leave?

    Annual leave generally continues to accrue while you are taking paid leave, including paid sick or carer’s leave. It can also accrue during certain types of unpaid leave, depending on the circumstances.

    However, it doesn’t accrue during most other unpaid leave, such as unpaid parental leave or unpaid leave taken by agreement with your employer.

    What happens to accumulated annual leave?

    The annual leave you accrue belongs to you, but workplace rules govern how that leave is saved, managed, or paid out over time. Australian workplace laws set clear guidelines to ensure you do not lose your balance, while also helping employers and employees manage excessive leave balances responsibly.

    Does annual leave roll over?

    Yes. Annual leave under the NES has no expiry date. If you don’t use it in one year, it simply carries over to the next. There is no “use it or lose it” rule, and your employer can’t cancel or reduce a balance you’ve already accrued.

    Managing excessive leave balances

    An annual leave balance is generally considered excessive when an employee has accrued more than 8 weeks of annual leave, or more than 10 weeks for shiftworkers.

    The rules for managing excessive leave balances can depend on the applicable award or agreement.

    When this happens, your employer should first try to work out a plan with you. If no agreement is reached, they may require you to take leave in writing. They must give reasonable notice and keep at least 6 weeks of leave in your balance.

    Cashing out and payout upon resignation

    Sick leave and annual leave are treated differently when your employment ends. Unused sick or carer’s leave isn’t paid out; it simply expires. Unused annual leave is different. Your employer must pay it out in your final pay. It must be paid at your usual rate, including any applicable leave loading.

    If your award or enterprise agreement allows it, you may be able to cash out some annual leave while you are still employed. The rules vary depending on your employment arrangement. Generally, you must retain at least four weeks of annual leave and have a written agreement with your employer.

    Falling sick on holidays: Converting annual leave to sick leave

    Taking time off is meant for rest and recovery, but unexpected illness can interrupt your plans. Under Australian workplace laws, mechanisms exist to protect your holiday entitlement if you fall unwell while away.

    Re-crediting your annual leave

    Getting sick during your holiday can be frustrating. The good news is you don’t have to lose your annual leave.

    If you become unfit for work because of illness or injury while on annual leave, you may be able to use accrued paid personal leave for the affected hours. You will generally need to meet the relevant notice and evidence requirements. If approved, those hours will not be treated as annual leave.

    Read our guide to sick leave.

    Getting a medical certificate while on holiday

    No one wants to get sick during a holiday. Finding a doctor in an unfamiliar place just to protect your annual leave can make it even more stressful.

    Depending on your workplace policy, you may also be permitted to provide a statutory declaration as evidence if consulting a local doctor while travelling isn’t possible.

    Under the Fair Work Act, you don’t have to see a doctor in person to get a medical certificate. As long as the certificate comes from a registered health practitioner and shows you were genuinely unfit for work, it can be accepted whether it was issued in person or via telehealth.

    If you need a medical certificate while travelling, Hola Health provides access to an online consultation with an AHPRA-registered medical practitioner. A medical certificate may be provided following a clinical assessment, if clinically appropriate. Fees may apply.

    Telehealth can be a convenient option when you are away from home and cannot easily access in-person care. It can complement your usual healthcare. If your symptoms are severe, worsening or potentially life-threatening, call 000 or attend your nearest Emergency Department.

    Using annual leave when sick leave runs out

    Full-time employees are entitled to 10 days of paid sick or carer’s leave each year. Part-time employees receive a proportional amount. If your paid sick leave runs out during a long illness,  You may be able to use accumulated annual leave if you and your employer agree.

    If you’re temporarily away from work because of an illness or injury, your employer generally can’t dismiss you. This protection usually covers up to 3 months, or up to 3 months within 12 months. You must provide evidence of your condition.

    Learn more about navigating a Medical Leave of Absence.

    FAQ

    1. What is annual leave in Australia?

    Annual leave is paid time off work that employees can take. It is provided under the National Employment Standards. Full-time and part-time employees earn four weeks of annual leave each year. They can use this leave to relax, travel, or take time off for personal reasons.
    No. Casual employees don’t accrue paid annual leave under the NES. Instead, they receive casual loading as extra pay to make up for not getting paid leave.
    It’s 20 working days, not 28 calendar days. The four-week annual leave entitlement is based on your normal working week, not the seven-day calendar week. For most employees, this means a five-day work week.
    A standard full-time employee works 38 hours over five days a week. This equals 7.6 hours a day. Since four weeks of annual leave is 152 hours, it works out to 20 leave days for most full-time employees.
    An employer can refuse a request for annual leave if the refusal is reasonable. The rules can depend on the applicable award, enterprise agreement, or employment arrangement.
    When employment ends, unused accrued annual leave must generally be paid out. The amount should be what the employee would have received if they had taken the leave, including applicable leave loading.
    Annual leave is meant for holidays, rest, and personal time. Any unused annual leave is paid out when you leave your job. Sick leave, also called personal or carer’s leave, is for illness, injury, or caring for a family member. Unlike annual leave, unused sick leave is not paid out and simply lapses. 

    Reference links: 

    Disclaimer: This article is for general information only and isn’t a substitute for individual medical or legal advice.

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