Annual Leave – Cashing Out

The modern awards commonly used in children’s services contain a clause permitting cashing out of annual leave. These include:

  • Children’s Services Award
  • Educational Services (Teachers) Award – Schedule B only
  • Clerks Private Sector Award
  • Social Community Home Care and Disability Services Award

There is one notable exception: the Educational Services (Teachers) Award 2010 (except Schedule B) which does not offer this provision. This means that teachers working in a preschool setting are not permitted to cash out annual leave. Due to the structure of salary payments under this award, annual leave is always taken in the Christmas closure and is therefore not able to accrue excessively.

Cashing out of annual leave will not apply to employees covered by an Enterprise Agreement unless the Agreement derives its annual leave conditions by direct reference to the relevant Modern Award. Some Agreements may already include provisions covering some or all of these issues.

Under the determination, employers and employees can agree to cash out a portion of the employee’s annual leave. This means that payment is received in lieu of taking the leave.

The following conditions apply:

  • each cashing out must be subject to a separate written agreement
  • the payment will be no less than the amount that would be paid if the leave was taken (therefore the cashed out payment will including leave loading if applicable).
  • the agreement must not result in the employee’s annual leave entitlement being less than 4 weeks
  • the maximum amount that can be cashed out is 2 weeks in any 12 months.


You can download a Sample Agreement to Cash Out Annual Leave here.