Often an employer is asked to cash out annual leave, usually when an employee is short of money or has a bill to pay.

The modern awards allow for an employee to cash out annual leave but certain conditions must be met;

1. The agreement to cash out annual leave must be put in writing and signed by both the employee and the employer and set out;

   • The amount of leave to be cashed out and the payment to be made to the employee, and

   • The date on which the payment will be made.

2. If the employee is under 18 years of age it must also be signed by a parent or guardian.

3. The maximum that can be cashed out is 2 weeks in any 12 month period.

4. After the cashing out the employee must still have available at least 4 weeks of annual leave. 

A separate written agreement is required on each occasion annual leave is cashed out.