Payjoey.

Annual leave · 2026-27 tax

Cashing out annual leave calculator

See how much of your balance you can cash out, and what it leaves in your pay after tax.

Fair Work and ATO rules · verified

Cash-out rules and withholding verified against the official sources — how we check.

In hours, as your payslip shows it: six weeks of 38 hours is 228.

Your pay is quoted
Paid each

Only if taking the leave would pay it. It is not part of the NES; where it applies it is most often 17.5%.

Cash-out in your pay

$2,177.23

76 hours is $3,269.23 before tax; $1,092 is withheld from it under the ATO’s Schedule 5.

How it’s made up

Your balance228 hrs
Most you can cash out (keeping 4 weeks)76 hrs
76 hours at $43.02 an hour$3,269.23
Withheld (Schedule 5, Method A)−$1,092
In your pay$2,177.23

Spread over 26 pays: $125 more a pay has $42 more withheld, × 26 = $1,092.

Its tax for the year, with Medicare$1,046.15
At tax time, on this alone$45.85 back
Super your employer adds$392.31
Leave left afterwards152 hrs (4 weeks)
Your cash-out at payday, and at tax time

Enter your details above to see this.

A single resident, 2026-27 rates, the same pay all year and no other income. Fair Work’s minimum rules; your award or agreement must allow cashing out at all, and can set its own terms.

Cashing out is being paid for annual leave instead of taking it, while you stay in the job. Start from the balance on your payslip, or work it out with the annual leave calculator. The payment is withheld from like a bonus, and the bonus tax calculator shows that method one step at a time.

How much you can cash out

Whether you can cash out at all depends on what covers your job, and in every case four weeks of your own ordinary hours must stay behind — 80 hours on a 20-hour week, not 152.

When annual leave can be cashed out, and the limits, by what covers the job
Covered byCan you?Limits
An awardIf the award allows it — most do, not allKeep 4 weeks; no more than 2 weeks in any 12 months
An enterprise agreementOnly if the agreement allows itKeep 4 weeks
Neither (award and agreement free)By agreement with the employerKeep 4 weeks

Fair Work states the two-week limit for awards only. Every cash-out needs an agreement in writing; under an award it is signed, names the leave, the amount and the payment date, and is made fresh each time. If the employee is under 18, a parent or guardian must also sign the agreement under an award.

Fair Work’s own example is Luanne, a hairdresser under the Hair and Beauty Award with 9 weeks saved. She can cash out 2 weeks — it is the award’s yearly limit, not her balance, that stops her — and has 7 weeks left.

How it is taxed

While you stay in the job, the ATO has your employer withhold from cashed-out leave using Schedule 5, the table for bonuses and back pay, rather than the table for leave paid out when someone leaves. Method A spreads the payment across the year’s pays, works out the extra tax on one of them and multiplies it back up, capped at 47% of the payment. Schedule 5 does not name cashed-out leave and the ATO sets no period for it, so Payjoey spreads it over the pay periods in a year — Method A's default for a payment that covers no defined period.

At tax time it is ordinary income at your marginal rate. Cashing out two weeks costs exactly the tax that two more weeks of pay would, and whatever the withholding got wrong is settled when your return is assessed.

What you give up

The hours leave your balance for good. Leave you keep is paid at your base rate when you take it, so a pay rise before then makes it worth more, and if the job ends every hour still in the balance is paid out anyway. None of that makes cashing out right or wrong; it is pay you have already earned, taxed like any other pay, with super on top. An employer cannot force or pressure an employee to cash out annual leave.

Frequently asked questions

Can I cash out all of my annual leave?
No. At least four weeks of your own ordinary hours have to stay in the balance afterwards — 152 hours on a 38-hour week. Under most awards there is a second limit of two weeks in any 12 months, so even a ten-week balance on 38 hours can release only 76 hours this year.
Is super paid on cashed-out annual leave?
Yes. The ATO lists cashed-out annual leave, and the loading paid with it, as ordinary time earnings and, from 1 July 2026, as qualifying earnings, so the 12% super guarantee is paid on top: $392.31 on two weeks of an $85,000 salary. Loading clearly paid for lost overtime is the one part left out.
How much tax will I pay on cashed-out annual leave?
Your marginal rate, as on any extra pay. Two weeks of an $85,000 salary is $3,269.23, and its tax for the year with the Medicare levy is $1,046.15 — 30c a dollar for the band and 2c for the levy. Your employer withholds $1,092 on the day, and the gap is settled when your return is assessed.
Do I get leave loading when I cash out annual leave?
If you would get it when taking the leave, yes: the payment has to match what taking the leave would have paid. At 17.5%, two weeks of an $85,000 salary pays $3,841.35 instead of $3,269.23. Loading is not part of the National Employment Standards, so it turns on your award or agreement, and the leave loading calculator works out whether you get it.
Can my employer make me cash out annual leave?
No. Fair Work is explicit that an employer cannot force or pressure you into it. Cashing out happens only when the two of you sign an agreement, and a fresh one is needed every time.
Can I cash out annual leave when I resign?
That is not cashing out. When a job ends, every hour of unused annual leave has to be paid out, with no four-week floor and no two-week limit, and the ATO taxes it under a different schedule from leave cashed out while you stay. The annual leave calculator works out the balance and what it is worth.

Where these rules come from

How we check sets out how every figure on this site is verified.