Yes. Unused annual leave accumulates from year to year under the National Employment Standards. It does not expire or reset on 1 January, 1 July or your work anniversary, and any balance left when you leave is paid out.
The harder question is how long you can keep stacking it up before someone else gets a say. This guide shows why the balance never lapses, the date your own balance will cross the 8-week mark that most awards treat as excessive, every way a carried balance can still go down, and the one kind of leave that genuinely can run out.
Key takeaways
- Section 87(2) of the Fair Work Act says annual leave "accumulates from year to year". There is no use-it-or-lose-it date in the NES.
- Accrual runs per year of service with your employer, so the calendar year, the financial year and your anniversary change nothing about the balance.
- Under the Clerks Award model term, a balance of more than 8 weeks (10 for a shiftworker) is excessive. From then on your employer can direct you to take some of it, after first trying to agree.
- Taking a week a year, a 38-hour day worker who starts from zero passes 8 weeks after about 2.7 years. Taking 4 weeks a year, never.
- Purchased leave is the exception. Under the Treasury Enterprise Agreement, credits not used within 12 months are refunded rather than carried.
Annual leave carries over with no expiry
Every full-time and part-time employee earns 4 weeks of paid annual leave for every year they work for the same employer, or 5 weeks for some shiftworkers. The leave builds up progressively with your ordinary hours, and whatever you do not use stays in the balance into the next year, and the year after that. The Fair Work Ombudsman puts it plainly: unused leave "will roll over from year to year", and it "does not have to be taken each year".
The yardstick is a year of service with your employer, not a calendar or financial year. The NES has no "leave year" that closes off, which is why nothing happens to your balance on 1 January, on 1 July when payroll rolls into a new financial year, or on the anniversary of your start date. None of the annual leave sections we read for this guide (ss 86 to 90, 93 and 94) sets an expiry date or a ceiling on how much can be carried.
Fair Work Act 2009 s 87(1): "For each year of service with an employer (other than periods of employment as a casual employee of the employer), an employee is entitled to: (a) 4 weeks of paid annual leave; or (b) 5 weeks of paid annual leave, if ..." s 87(2): the entitlement "accrues progressively during a year of service ... according to the employee's ordinary hours of work, and accumulates from year to year." (AustLII consolidated text, retrieved 7 October 2026.)
Fair Work Ombudsman, Annual leave (content last updated 25 September 2026): "The leave accumulates gradually during the year and any unused annual leave will roll over from year to year." Annual leave fact sheet (content last updated 16 January 2026): "Annual leave can be taken as soon as it is accumulated. It also does not have to be taken each year." Both retrieved 7 October 2026.
When a carried balance gets too big
Rolling over is automatic, but it is only entirely your call up to a point. The model excessive leave term in modern awards, quoted here from the Clerks Award, treats a balance of more than 8 weeks as excessive, with 10 weeks as the line for a shiftworker. Once you are past that line, an employer who has genuinely tried and failed to agree on dates with you can direct you in writing to take some of it. How that direction works, and its limits, is covered in our guide to excessive annual leave.
How quickly you reach the line depends on how much leave you take each year. Starting from a zero balance:
| Leave taken each year | Day worker (4 weeks a year, mark is 8 weeks) | Shiftworker (5 weeks a year, mark is 10 weeks) |
|---|---|---|
| None | 2.0 years | 2.0 years |
| 1 week | 2.7 years | 2.5 years |
| 2 weeks | 4.0 years | 3.3 years |
| 3 weeks | 8.0 years | 5.0 years |
| 4 weeks | Never | 10.0 years |
| 5 weeks | n/a (only 4 weeks accrue) | Never |
Each figure is the excess mark divided by the weeks left over each year, so the balance goes above the mark just after the time shown. The marks are measured in weeks of your own ordinary hours. In hours they look like this:
| Balance | 38 hours a week | 22.8 hours a week (three 7.6-hour days) |
|---|---|---|
| 4 weeks (one year of accrual for a day worker) | 152 hours | 91.2 hours |
| 6 weeks (the least a direction can leave you with) | 228 hours | 136.8 hours |
| 8 weeks (excess mark, day worker) | 304 hours | 182.4 hours |
| 10 weeks (excess mark, shiftworker) | 380 hours | 228 hours |
An enterprise agreement can set its own figure. The Treasury Enterprise Agreement 2024 to 2027, for example, describes annual leave as cumulative and uses 60 days as its excess level: above that, the employee and manager are to agree a reasonable time to bring the balance back to 60 days or below. If an agreement covers you, read its leave clause rather than relying on the award number.
Clerks (Private Sector) Award 2020 [MA000002] cl 32.6(a): "An employee has an excessive leave accrual if the employee has accrued more than 8 weeks' paid annual leave (or 10 weeks' paid annual leave for a shiftworker ...)". cl 32.7(a): after the employer "has genuinely tried to reach agreement", it "may direct the employee in writing to take one or more periods of paid annual leave". (FWC consolidated award, incorporating amendments up to 1 July 2026, retrieved 7 October 2026.) Fair Work Ombudsman, Direction to take excess annual leave (content last updated 7 August 2026): "Excess annual leave is typically when an employee has accrued more than 8 weeks of paid leave. For shiftworkers, this is typically 10 weeks." Retrieved 7 October 2026.
Treasury Enterprise Agreement 2024 to 2027, Section 6, Leave (no date on page, retrieved 7 October 2026): annual leave "is cumulative"; above 60 days "(excess annual leave balance) the employee is to reach an agreement with their manager on a reasonable time period to reduce the balance to 60 days or below."
When your balance will pass 8 weeks
You do not need to start from zero to work out your own date. Take the hours on your latest payslip, subtract them from 8 times your weekly hours, and divide the gap by your net growth per year (4 weeks of accrual minus the leave you usually take).
Mia is a full-time day worker under the Clerks Award on 38 hours a week. Her payslip on Wednesday 7 October 2026 shows 200 hours, and she takes one week (38 hours) of leave a year. She accrues 152 hours a year, so her balance grows by 114 hours a year after leave.
Her excess mark is anything above 304 hours (8 x 38), which leaves a gap of 104 hours. 104 divided by 114 is 0.91 of a year, or 333.2 days, so the first full day her balance sits above 304 hours is around Monday 6 September 2027. If she took 2 weeks a year instead, net growth falls to 76 hours and the date moves out to about February 2028. Nothing happens to her balance on 1 January or 1 July along the way.
If her balance then stays excessive for more than 6 months (from about March 2028), cl 32.8 of the Clerks Award gives her a right of her own: she can give written notice requiring her employer to grant some of the excess. The notice periods for that are set out in how much notice for annual leave.
If Mia kept the same pattern and no direction was ever made, this is where her balance would sit on each anniversary of the payslip date:
| Date | Balance | In weeks of 38 hours |
|---|---|---|
| Thursday 7 October 2027 | 314 hours | 8.3 weeks |
| Saturday 7 October 2028 | 428 hours | 11.3 weeks |
| Sunday 7 October 2029 | 542 hours | 14.3 weeks |
These are straight-line estimates. Accrual is added each pay and leave is taken in blocks, so the real crossing date can move by a few days either way.
The annual leave calculator works out how many hours a year your roster earns. Put that figure into the method above to date your own 8-week mark.
What can still shrink your balance
A carried balance only goes down in a handful of ways. Some need your agreement and some do not.
| What happens | Do you have to agree? | The rule in brief | More detail |
|---|---|---|---|
| You book leave | It is your request | Dates are settled by agreement, and saying no has to be reasonable (s 88). | how much notice for annual leave |
| Excess leave direction under an award | No, once the employer has genuinely tried to agree | Only available above 8 weeks (10 for shiftworkers), and the direction must leave you at least 6 weeks (Clerks cl 32.6(a), 32.7(b)). | excessive annual leave |
| Shutdown direction under an award | No | 28 days written notice of the shutdown, and it can only use leave you have already accrued (Clerks cl 32.5). | Christmas shutdown |
| Requirement to take leave, award and agreement free staff | No, but it must be reasonable | The Note to s 94(5) names a big accrued balance and a business closure as cases where it may be reasonable. | excessive annual leave |
| Cashing out | Yes, in writing each time | At least 4 weeks must remain afterwards, and most awards cap it at 2 weeks in a 12-month period. | cashing out annual leave |
| Your job ends | Not needed | The whole untaken balance is paid out (s 90(2)). | annual leave payout calculator |
The calendar never reduces it: a new year, a new financial year or a work anniversary leaves the balance where it was. Which kinds of time off still earn leave, and which pause it, is covered in do you accrue annual leave while on leave.
Fair Work Act 2009 s 88: "(1) Paid annual leave may be taken for a period agreed between an employee and his or her employer. (2) The employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave." (s 88.) s 94(5): "An employer may require an award/agreement free employee to take a period of paid annual leave, but only if the requirement is reasonable." Its Note: reasonable "if, for example: (a) the employee has accrued an excessive amount of paid annual leave; or (b) the employer's enterprise is being shut down for a period". The 4-week cash-out floor is in s 93(2)(a) for award and agreement terms and s 94(2) for award and agreement free employees (s 93, s 94). AustLII consolidated text, retrieved 7 October 2026.
Clerks Award cl 32.5(b): "The employer must give the affected employees 28 days' written notice of a temporary shutdown period, or any shorter period agreed between the employer and the majority of relevant employees." cl 32.7(b): a direction "is of no effect if it would result at any time in the employee's remaining accrued entitlement to paid annual leave being less than 6 weeks". (MA000002, retrieved 7 October 2026.) Fair Work Ombudsman, Annual leave fact sheet (content last updated 16 January 2026): "the employee must retain at least 4 weeks annual leave"; "there must be a written agreement ... on each occasion"; "in most awards, the maximum amount of accrued annual leave that may be cashed out in any 12 month period is 2 weeks." Retrieved 5 October 2026.
Your balance when you leave
Resigning, being dismissed or being made redundant does not cancel a carried balance. Section 90(2) makes your employer pay the amount you would have been paid if you had gone on that leave. Because the test asks what you would be paid for taking it, hours banked years ago are paid at your rate at the end of the job, not the rate you were on when you earned them. The Fair Work Ombudsman adds that the payout includes annual leave loading if it applied during your employment. The rule still applies if you do not pass probation.
You can use some of the balance during your notice period instead, but only with your employer's agreement. To estimate the cash figure, use the annual leave payout calculator. How the payout is taxed is covered in annual leave payout tax, and whether super applies in superannuation on annual leave.
Fair Work Act 2009 s 90(2): "If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave." (AustLII, retrieved 7 October 2026.) Fair Work Ombudsman, Annual leave fact sheet (content last updated 16 January 2026): the payout "has to be the same as what the employee would have been paid if they took the leave. This includes annual leave loading if it applied during employment." Retrieved 7 October 2026.
Fair Work Ombudsman, Probation (content last updated 14 August 2026): an employee who doesn't pass probation is still entitled to "have their unused accumulated annual leave hours paid out." Resignation: "An employee can take paid annual leave during a notice period if their employer agrees to the leave." Both retrieved 5 October 2026.
Purchased leave can lapse
Ordinary annual leave never runs out, but leave you buy can. Some public sector agreements let staff give up part of their salary for extra weeks off, and attach a time limit to it. Under the Treasury Enterprise Agreement 2024 to 2027, purchased credits that are not used within 12 months are not carried forward: the purchase value is paid back to the employee instead. That is one named agreement, so check the terms of yours. The purchased leave calculator shows what buying extra weeks costs per pay.
Treasury Enterprise Agreement 2024 to 2027, Section 6, Purchased leave: "Where purchased leave credits are not used within 12 months after the purchase, the purchase value of the credits is returned to the employee." Also: "By agreement, ongoing employees who do not have an excess annual leave balance may purchase up to 40 days' leave in each 12 month period". No date on page, retrieved 7 October 2026.
Casuals and part-timers
Casuals have nothing to carry. Section 87 excludes "periods of employment as a casual employee" from the service that earns annual leave, so no balance builds in the first place. The reasons, and what the casual loading is paid instead of, are in do casuals get annual leave.
Part-timers carry over exactly like full-timers, in hours of their own roster. Someone working three 7.6-hour days has an 8-week mark of 182.4 hours, not 304, so the excess point arrives at the same number of years as for a full-timer with the same leave habits. The part-time annual leave calculator converts a part-time week into hours of leave.
Does annual leave roll over: questions
Does annual leave carry over in Australia?
Yes. Under s 87(2) of the Fair Work Act it accumulates from year to year, and the Fair Work Ombudsman says unused leave rolls over. No expiry date applies.
What happens to my annual leave if I don't use it?
It keeps growing. Once it passes 8 weeks (10 for a shiftworker), an award can let your employer direct you to take some after first trying to agree, and anything still unused when the job ends is paid out under s 90(2).
Is there a limit on how much unused annual leave can roll over?
Not in the NES. The limit that matters in practice is the award's excessive leave term: above 8 weeks you can be directed to take leave, though a direction cannot take you below 6 weeks.
How often does annual leave roll over?
It does not roll over on a set date. It is added progressively, usually each pay, and simply stays in your balance until you use it, cash it out or leave.
Does annual leave reset on 1 July or on my work anniversary?
No. The entitlement is counted per year of service, and nothing in the NES clears a balance at the start of a financial year or on the anniversary of your start date.
Does annual leave roll over in NSW?
Yes. Section 87 is a national rule, so it reads the same in NSW as in every other state for employees covered by the Fair Work Act. NSW state public sector employees have their own instruments, and those are outside the scope of this guide.
Can my employer make me use my rolled-over leave?
Only in set situations: an award direction for excessive leave, an award shutdown direction with 28 days written notice, or, for award and agreement free staff, a requirement that is reasonable under s 94(5).
Is it better to take annual leave or have it paid out?
That depends on your circumstances, but the rules narrow the choice. While you are employed, the only way to be paid instead of taking leave is cashing out, which needs a written agreement each time and must leave you at least 4 weeks. When you leave, the balance is paid at your rate at that point. Tax and super are treated differently for each, so read annual leave payout tax before deciding.
Do I lose my annual leave if I resign?
No. Your untaken balance is paid out with your final pay. Taking it as leave during your notice period instead needs your employer's agreement.
Author & reviewer
Sarah has spent over a decade advising Australian SMBs on Fair Work, NES compliance, and payroll. Based in Sydney, she has worked across hospitality, retail and professional services.