Annual leave

Annual leave must generally be taken by agreement between the employer and employee. An employer can give an employee a general direction to take annual leave, but cannot direct them as to when they must take the leave (i.e. cannot direct them to take the leave at a particular time). A WA award or industrial agreement which has a provision that enables an employer to require an employee to take annual leave at a particular time is of no effect.

Where an employee has accrued their annual leave more than 12 months ago, an employee can take annual leave with 2 weeks’ notice to their employer, and the employer cannot refuse their request to take annual leave.

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.

Taking annual leave during specific periods, such as Christmas closedown

As noted above, annual leave must generally be taken by agreement between an employer and employee.

An employer and employee may agree in advance, through a contract of employment, initial appointment letter or verbal agreement, about specific periods when the employee is to take annual leave, such as a period when the business is closed.

In the absence of an agreement, an employee cannot be directed to take annual leave at a particular time. 

An employee is generally entitled to be paid out annual leave when employment ends due to resignation, dismissal or redundancy. The exact entitlements may depend on the specific circumstance of employment ending.

Unused annual leave for any completed year of employment gets paid out when employment ends, except where the employee is dismissed for misconduct and the annual leave relates to a year of service completed after the misconduct occurred.

Employees get paid out pro-rata annual leave for part of a year of employment when they are terminated by the employer due to redundancy or dismissal (except for dismissal for misconduct). Pro-rata annual leave is also paid out when the employee resigns and gives the notice required by the employee’s WA award or industrial agreement, or if no award or agreement applies, the notice required by their contract of employment.

Some WA awards and industrial agreements also require an employee to be paid pro rata annual leave when they resign without giving the required notice, or when they are dismissed for misconduct. 

Employees are to be paid their current rate of pay when they take annual leave or when annual leave is paid out when employment ends.

Visit Calculating paid leave for commission or piece rate employees for information on how to calculate leave payments for employees paid by commission or piece rate. 

Annual leave loading

Employees who are not covered by an award or agreement do not receive annual leave loading unless it is specified in a contract of employment.

WA awards and industrial agreements may require annual leave loading (usually 17.5%) to be paid when an employee takes annual leave, and may require payment of annual leave loading when annual leave is paid out when an employee's employment ends. Awards and agreements may also require payment of certain allowances during annual leave.

For information about annual leave for employees receiving income or workers compensation, visit Paid leave entitlements and workers compensation. 

Employees covered by WA awards or industrial agreements

Where an employee is covered by a WA award or an industrial agreement, an employee can only cash out annual leave if there are is a specific provision in the award or agreement which allows annual leave to be cashed out. Most WA awards do not contain provisions which allow cashing out of annual leave.

If an award or industrial instrument does allow cashing out, employers and employees must comply with the specific requirements on cashing out provided in the award or agreement. Employees who have queries about the specifics of cashing out provisions in an industrial agreement should contact their employer for information.

If the employee is not covered by a WA award or industrial agreement

Where the employee is not covered by a WA award or industrial agreement, employers and employees can agree to cash out annual leave if certain requirements are met.

The Minimum Conditions of Employment Act 1993 allows that after the end of any year of employment, the employer and employees may agree that the employee may forgo taking their annual leave in relation to that year, if all of the following circumstances are met:

• the amount of annual leave forgone does not exceed 50% of the whole amount of annual leave entitlement for that year of employment;
• the employee is given an equivalent benefit in lieu of the amount of annual leave forgone; and
• the agreement is in writing, signed by the employer and the employee.

Any agreement to cash out annual leave must be kept as an employment record, as part of an employer’s record keeping obligations.

An employer cannot:

• make an offer of employment to somebody that requires them to agree to forgo taking and cash out annual leave;
• exert undue influence or undue pressure on the employee in relation to whether or not to forgo taking and cash out annual leave; or
• require the employee to forgo taking and cash out an amount of annual leave.

There is not a minimum entitlement to convert annual leave to personal leave if the employee was sick during a period of annual leave. Some WA awards and industrial agreements may contain provisions regarding converting annual leave to personal leave.

From 31 January 2025, if the period during which an employee takes paid annual leave includes a public holiday that falls on a day the employee would ordinarily have worked, the employee:

• is taken not to be on paid annual leave on that public holiday;
• is entitled to be absent from work on that day (or part-day); and
• is entitled to be paid for that public holiday.

That is, the employee is not required to take a day of paid annual leave on a public holiday which falls during a period of leave for which they would otherwise be entitled to be absent from work.