Carry over leave refers to the unused portion of an employee's paid leave entitlements, such as annual leave or personal/carer’s leave, that is transferred from one year to the next. In Australia, employees who do not take their full leave entitlement within a 12-month period usually retain the unused balance, unless a modern award, enterprise agreement, or contract states otherwise.
This accumulation ensures that workers can take sufficient time off when needed, even if they were unable to do so in the previous year.
While carry over leave is generally permitted, employers can set policies (within legal limits) to:
Note: Any direction to take leave or cash it out must comply with the Fair Work Act and applicable modern award or enterprise agreement.
Carried over leave gives employees flexibility to take extended breaks, recover from illness, or manage personal responsibilities.
With accurate tracking of leave accruals and balances, businesses can plan ahead and manage workloads efficiently.
Tracking carry over leave correctly ensures employers avoid underpayment, unlawful termination, or record-keeping breaches.
If employees accumulate large leave balances without taking time off, it can:
Many businesses set up triggers to prompt a conversation when balances exceed 6–8 weeks.
Explore Leave Management with Microkeeper.
Microkeeper's payroll and HR software simplifies carry over leave by:
This ensures compliance with Fair Work obligations and reduces the admin burden.
In general, no. But awards or contracts may place a cap or require that excessive balances be addressed.
Yes, under certain conditions and with sufficient notice, employers can direct leave if it is considered excessive.
All accrued unused leave must be paid out in the employee’s final pay.
Not usually, unless specific expiry terms are written into contracts or enterprise agreements.
Carry over leave provides employees with the flexibility to plan meaningful breaks while helping employers maintain a fair and sustainable workforce. Tools like Microkeeper HR Software ensure these entitlements are tracked accurately, managed efficiently, and remain fully compliant with Australian employment law.
Disclaimer: This article is intended for general information only. For legal advice or award-specific guidance, consult the Fair Work Ombudsman or a legal professional.