# How to pay out (cash out) an employee’s leave

KB135

### Overview

“Paying out” an employee’s leave means giving them money in respect of some or all of their accrued leave and then clearing out the corresponding leave balance for an employee who is continuing employment. The employee does not accrue further leave on the paid-out leave (normally an employee will accrue leave when they are “on leave”).

You may be paying out because they have changed their employment status from full time to casual, or they may have requested a payout. Be sure to check relevant regulations about how much annual leave you are allowed to pay out and how it is taxed.