All you need to know about requesting Annual Leave

With year’s end fast approaching, you’ll be looking to put in annual leave to take a break over the Holiday and New Year break.

Annual leave is a part of ten National Employment Standards (NES) that apply to all employees in Australia (except casuals), covered by the national workplace relations system, regardless of the award, agreement or contract.

The NES lays out the base requirements to annual leave which include:

• when it can be taken
• pay rates
• what happens when there is a transfer of employment or termination

Below, we’ll look at some of the commonly asked questions about annual leave and lay out some of the frequently asked questions that our payroll experts are asked.

What is the minimum amount of Annual Leave?

All employees, except casual staff, are entitled to a minimum of four weeks of annual leave per year. That said, the leave accrues over time and starts from the first day of employment. Annual leave continues to accumulate while the employee is on paid annual leave or paid personal/carer’s leave. However, it does not accrue on unpaid leave. Simple, right?

As for shift workers, they have a minimum entitlement to five weeks of annual leave.

When can you take paid Annual Leave?

It has to be agreed between employer and employee; however, an employer cannot unreasonably say no. So, when there is a positive leave balance, an employee can request paid annual leave as a part of their working entitlement.

How to submit a request for Annual Leave?

Submitting a request for annual leave as an employee is easiest when your payroll software has an Employee Self Service (ESS) platform, or mobile app (available on both App Store or Google Play).

If your organisation uses Aurion ESS, tips and tricks on how to access your portal can be found in our quick guide here. Using this platform, employees can self‑serve their requests and balances, and managers can approve requests faster, helping teams forecast leave and payroll confidently with accurate and compliant software.

What if you have left-over Annual Leave?

Employees aren’t required to take all of their leave entitlements every calendar year, as it can be rolled over until the next period. Although, it is important to note that if you accrue large amounts of leave, than your employer may request for you to take a period of leave. Generally speaking, eight weeks (or ten for shift workers) is seen as excessive.

Is it reasonable for an employer to direct an employee to take Annual Leave?

Yes, an employer may direct a period of leave to be taken if there is a mandatory shut-down period (such as the holiday or Christmas break), or if an employee has an excessive amount of leave. Further information about this instance can be found on the Fair Work website.

Reasoning behind this directive could be that earned and untaken leave is seen as a liability to organisations, or a debt that is owed. Paid leave such as Annual or Long Service Leave is officially considered a “leave liability” for employers, as it’s an obligation that businesses must include in their financial forecasting for their employees.

Can Annual Leave be taken in advance before it’s been accrued?

Some agreements allow employees to take their annual leave in advance once agreed in writing by their employer or manager.

Most awards or agreements that allow payment of leave in advance also include an agreement that must be signed. The agreement states that if you take leave in advance and don’t accrue it all back before your employment ends, then the employer can deduct the amount still owing from the final pay check.

What happens to Annual Leave if an employee is terminated?

If you have any annual leave left upon termination, it must be paid out as if you had taken the leave. This will include any entitlement to annual leave loading in the Award or agreement.

However, a common mistake is that employers overpay employees. It is critical to remember that annual leave or Long Service Leave on termination are not subject to the payment of superannuation.

Terminations can be a fraught time for all involved, so the following might come in useful;

• Calculate leave entitlements on all ordinary time earnings in the final pay period
• Deduct any paid leave hours taken during the final pay period from the balance
• Determine the reason for the termination and tax as appropriate.

Paying Annual Leave to Employees

As an employer, paying annual leave as stated by Fair Work to all employees (except for casuals) is a legal requirement. For more in-depth information about paying leave as an employer, we have that covered: Your expert guide to paying annual leave as an employer.

Still not sure of something? The Aurion Payroll team has decades of experience and have the answers to anything payroll and leave related. Don’t hesitate to get in touch with one of our experts should you wish to know more!