Annual leave

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EmployerEmployee / worker

The information on this page applies only to employers and employees in the WA state industrial relations system. The state system covers businesses which operate as sole traders, unincorporated partnerships, unincorporated trust arrangements as well as any incorporated associations or not for profit bodies that are not trading or financial corporations.  The Guide to who is in the WA State System has more detail.

This information does not apply to any business which operates as a Pty Ltd business and is a trading or financial corporation nor to any incorporated association or not for profit body that is a trading or financial corporation. These businesses and organisations are in the national fair work system and should visit the Fair Work Ombudsman website for information on employment laws. 

Please note this is general information on annual leave based on the minimum entitlements for employees. WA awards may specify additional requirements relating to payment for annual leave and how and when annual leave is taken by employees. View WA Award summaries here

Frequently asked questions about annual leave

Who is entitled to annual leave?

Full time and part time employees are entitled to paid annual leave.   Casual employees are not entitled to paid annual leave. Employees who are paid solely by commission or piece rate and are not covered by a WA award are not entitled to paid annual leave.

Full time employees are entitled to four weeks of annual leave for each year of completed service, paid up to a maximum of 152 hours.

Part time employees are entitled to annual leave of four weeks per year but paid on a pro rata basis according to the number of hours they work. For example if an employee works 20 hours per week they are entitled to 4 weeks of annual leave paid at 20 hours per week.

How do I calculate annual leave?

Annual leave accrues on a weekly basis and you can calculate how much annual leave an employee has accrued based on how many weeks they have worked -

  • a full time employee accrues 2.923 hours of annual leave for each completed week of work (based on the standard 38 hour week)
  • a part time employee will accrue the relevant proportion of 2.923 hour annual leave for each completed week of work.

Wageline’s Annual Leave Calculation Guide can help you work out annual leave entitlements for full time and part time employees.

Annual leave is a cumulative entitlement, which means that any leave that is not taken can be carried over to the next year.

What should employees be paid when they take annual leave?

Employees are to be paid their current rate of pay when they take annual leave. 

Some WA awards provide for payment of certain allowances and some penalty rates in certain circumstances while on annual leave.

Most WA Awards require annual leave loading to be paid during annual leave.

Do employees have to be paid annual leave loading?

If a WA award applies to an employee, it is likely that they will be entitled to annual leave loading (usually 17.5%) when they take annual leave. Please check any specific requirements in the applicable award about annual leave loading in the WA award summaries.

Employees who are award free do not receive annual leave loading unless it is specified in a contract of employment.

Can an employee cash out their annual leave?

Most WA awards do not provide for cashing out of annual leave. 

An employer can agree to an employee cashing out their annual leave but all of the following conditions must be satisfied:

1. The employee is award free, or the applicable award provides for cashing out of annual leave.

2. The employee must have at least one year's accrued annual leave.

3.  The employer and employee can only reach agreement to cash out up to 50% of the employee’s annual leave for an equivalent benefit (usually cash). 

4. The agreement must be genuine (ie the employer cannot exert undue influence or pressure to reach the agreement to forego any amount of annual leave) and the agreement must be in writing.  The agreement should be retained with time and wages records.

5. The employer cannot make an offer of employment to somebody that requires them to agree to the cashing out of leave.

Does an employee have to work 12 months before they take any leave?

Generally, an employee needs to work for 12 months before they can take annual leave unless the employer agrees that the employee can access the annual leave earlier. Some awards contain specific provisions to enable annual leave to be taken earlier.  For instance, the Restaurant, Tearoom and Catering Workers' Award provides that the employer and employee may agree in writing that annual leave may be given and taken before the completion of 12 months' continuous service.

Can an employer force an employee to take annual leave?

There is no legislative provision which enables an employer to force an employee to take annual leave.  Some awards have provisions that enable an employer to require an employee to take leave at a specified time.  An example is the Shop and Warehouse (Wholesale and Retail Establishments) Award which provides that an employee shall receive at least two weeks' notice from the employer as to when leave is to be taken.​ Check your award or contact Wageline.

Does an employer need to give notice to employees to take leave? 

You would need to check your award provisions.  For instance the Shop and Warehouse (Wholesale and Retail Establishments) Award provides that an employee shall receive at least two weeks' notice from the employer as to when leave is to be taken.

Can an employee be required to take annual leave if a business is closed down over Christmas?

The ability to close down over Christmas and require employees to take annual leave depends upon the wording in the relevant WA award. Awards have quite varied provisions concerning Christmas close downs so it is important to be clear about what applies in your particular workplace. 

If the award has no provisions then the employer would need to establish that a Christmas close down is custom and practice in the workplace i.e. happens consistently every year. If this is the case, it is good practice for the employer to alert new employees when they start work that some of their annual leave will have to be taken at Christmas time.

Can an employer refuse an employee’s request for annual leave?

If an employee accrued their annual leave more than 12 months ago, the employer cannot refuse their request to take annual leave.

Some WA awards include provisions on when employees can be required to take leave. For instance, the Shop and Warehouse (Wholesale and Retail Establishments) Award and the Hairdressers Award provides that employees shall be given and take annual leave within 6 months after the date it falls due.

Does an employee have to give their employer notice of an intention to take annual leave? How much notice is required?

Yes - an employee needs to give notice to their employer before taking annual leave.  

An employee can take annual leave with two weeks’ notice to their employer, if the leave was accrued more than 12 months ago.  If the leave has not yet been accrued for 12 months, the employee needs to reach an agreement with their employer about taking the leave.

If an employee was sick while on annual leave, can this be changed to sick leave?

Most WA awards do not allow employees to convert annual leave to sick leave. There are a few WA awards that will allow this in certain circumstances.

Employees who are award free do not have an entitlement to convert annual leave to sick leave. 

What happens to annual leave if it is not all used on one year? 

Annual leave is a cumulative entitlement, which means that any leave that is not taken can be carried over to the next year.

What happens if the employee doesn’t have enough annual leave – can they still go on holiday?

There is no obligation on an employer to grant an employee time off (paid or unpaid) for annual leave if there is no entitlement.

Please contact Wageline if you need additional information on annual leave obligations.

What records does an employer need to keep?

An employer must keep records of annual leave accrual and annual leave taken.

All state system employers are legally required to keep employment records that detail time worked, leave taken and pay received by employees.

Learn more on the record keeping requirements page

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