Understanding Your Rights Around Annual Leave During Resignation
When preparing to resign, many employees wonder about their financial entitlements, especially annual leave. Questions like “Do I get my annual leave paid out?” or “Can I resign while on leave?” can cause confusion.
This guide simplifies the essentials of annual leave during resignation, helping you navigate your departure confidently and with clarity.
What Happens to Your Annual Leave When You Resign?
One of the most common questions is: “What happens to my annual leave when I resign?”
In Australia, if you resign with unused annual leave, you’re typically entitled to be paid out for that leave. This can be a significant financial buffer as you transition to your next opportunity.
Under national employment law, employees must be paid for accrued but unused annual leave when they leave a role. However, the exact calculation may vary depending on your length of service, award, or workplace policy.
The Complexities of Annual Leave Payout on Termination
Terms like “annual leave payout on termination” and “leave payout after resignation” often get thrown around interchangeably, but the rules might differ slightly depending on your award or contract.
In most cases, your unused annual leave will be paid at your base pay rate. Review your employment agreement for any clauses that might affect this payout.
What If You're On Leave When Resigning?
Yes, you can resign while on leave, whether it's annual leave or sick leave.
Your leave status doesn’t affect your right to resign or to be paid out any unused annual leave. Just ensure your resignation process is formal, clear, and documented.
If you're on sick leave, it may be wise to seek advice before resigning, especially if you're dealing with WorkCover or medical certificates.
Practical Considerations for Resigning
- Communication: Always provide written notice and follow your workplace’s notice period requirements.
- Documentation: Submit a formal resignation letter, even if you've had a conversation about leaving.
- Review Company Policies: Your contract might include special clauses about unused leave payout. Double-check.
- Seek Legal Advice: If you’re unsure about your entitlements or there are complications, speak to an employment lawyer or advisor.
Understanding how your annual leave is handled on resignation can give you confidence and financial clarity as you move forward. Being proactive, informed, and professional helps ensure a smoother transition into your next role.
Your rights matter, don’t leave money on the table when changing jobs.
Discover More About Your Employment Rights
Want to learn more about leave policies, employee entitlements, and how to navigate your workplace? Stay tuned for our upcoming posts, or get personalised support from our team.
Resignation Letter Template – Make Your Last Impression Count
Writing a professional resignation letter is just as important as your first impression during the hiring process.
Still unsure about resigning? It may help to speak with a career counsellor. A wrong move can set you back months. According to this source, it can take about one month per $10,000 of desired salary to find your next job.
Need support? Book a career counselling session before handing in your notice.
Only 2% of applicants typically get interviews, compared to a 76% success rate with The Perfect Resume. So why not increase your odds?
The Importance of a Thoughtful Resignation Letter
Your resignation letter should be professional, grateful, and forward-thinking. Even if you’re bitter, be diplomatic. Industries are small, today’s manager might be tomorrow’s reference.
Don’t burn bridges. Don’t resign via text. And for the love of contracts, don't send it under the influence.
Formal Resignation Letter Example
The National Corporation
4th March 2026Dear John Smith – Regional Manager,
Re: Formal Resignation
Please accept this letter as formal notice of my resignation as Regional Team Leader. My final working day will be 18 March 2026.
I’m excited to be taking the next step in my career, though this transition is bittersweet. I sincerely thank you for your guidance and support during my tenure.
I’m committed to ensuring a smooth handover and wish The National Corporation continued success.
Kind regards,
Melissa Peacock
Click here to download your formal resignation letter template.
Retirement Resignation Letter Example
The National Corporation
4th March 2026Dear John Smith – Regional Manager,
Re: Notice of Retirement
Please accept this letter as formal notice of my retirement from the Regional Team Leader position. My final working day will be 18 March 2026.
As I prepare for the next chapter of my life, I want to express my gratitude for the opportunities and support provided to me at The National Corporation.
If there is anything I can do to assist during this transition, please don’t hesitate to ask.
Kind regards,
Melissa Peacock
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