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FAQ: Does my employer have to pay out my accrued annual leave when I leave my job?

  • Anne-Marie Dolan
  • 3 days ago
  • 2 min read


Yes. If you leave your job in New Zealand, your employer must pay you for any unused annual leave you’ve earned.


FAQ Annual Leave Auckland Wellington Christchurch Calendar with blocks spelling out pay day.

Under the Holidays Act 2003, employees are entitled to be paid out:

  1. Any unused annual leave entitlement (leave you became entitled to after 12 months of work), and

  2. Any accrued annual leave (leave you’ve been building up since your last anniversary date but haven’t yet become entitled to).

This payment must be included in your final pay when your employment ends.


Your employer must calculate your annual leave payout using the method set out in the Holidays Act. In simple terms:

  • For entitled leave: you are paid the greater of

    • your ordinary weekly pay, or

    • your average weekly earnings over the last 12 months.

  • For accrued leave: you are paid 8% of your gross earnings since your last entitlement anniversary, minus any leave already taken in advance.


Your unused leave must be paid on your final payday. This is usually your last scheduled pay day after your employment ends, unless your employment agreement says otherwise.



If your employer does not include your entitled and accrued annual leave in your final pay, they may be breaching the Holidays Act.  Get in touch for a free consultation to discuss whether you have a case.  MathewsWalker.co.nz | 0800 612 355



Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal advice. While we strive to keep the information accurate and up to date, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. For specific legal advice tailored to your situation, please contact a qualified legal professional. 


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