Christmas is on its way and with this pending holiday comes the typical myriad of additional pressures. This is the time of year that some employees may be thinking about their leave balances and pondering if they could have some of this balance paid out in cash.

If your employee has a sufficient unused Entitled Annual Leave (sometimes called Outstanding), you can consider a request for a cash up of leave.

Why would I consider Cashing up my employees Annual Leave?

Unused Entitled Annual Leave is a liability to your business. If your employees are not using their Entitled Annual Leave, it increases debt, increases the risk to workplace safety and can indicate that some employees may not be accessing periods of rest as they should. It is recommended that you check your leave balances regularly, so you can make informed decisions regarding these matters.

It is important to note – an employer cannot force or pressure an employee to cash up leave. Nor can cash up be a condition of employment. And in a similar vein, the employer is entitled to refuse a request for Annual Leave Cash Up. Declined requests must be addressed in writing, however, an explanation for the decision is not mandatory.

How much leave can my employee cash in?

One week of Entitled Leave is the maximum that can be cashed out each year. This can be taken a few days at a time, but the total days cashed up between anniversary to anniversary cannot exceed an ordinary week.

How can I check if I can give my employee a cash up?

Cash ups come from Entitled Outstanding Leave balances. See below for an example of which components to look at for cash up.
(I am not addressing Kiwisaver in this example)