Final Pay and Termination — Final Pay, Unused Annual Leave and the 21-Day Unfair Dismissal Deadline
What you are owed when your employment ends in Australia — final pay, unused annual leave payout, and the unfair dismissal remedy that is only available within 21 days of the dismissal taking effect. A summary of rights that are hard to recover once missed.
Termination entitlements — what you can receive
In Australia, whether you resign voluntarily or are dismissed, wages up to your last day of work and the payout of unused annual leave are rights guaranteed by law. Depending on how the employment ends, a notice period (or payment in lieu of notice) and, in the case of redundancy, redundancy pay may be added on top. These standards are based on the NES (National Employment Standards), which apply to all employees. This guide focuses solely on the end-of-employment stage — for leave entitlements during employment see the leave entitlements guide, and for the process of reporting unpaid wages see the workplace issues reporting guide.
Resignation, dismissal, redundancy — get the terms straight first
Resignation is when you choose to leave; dismissal is when your employer ends the employment. Redundancy is when the employment ends because the job itself no longer exists — not because of the person — and summary dismissal is dismissal without notice, permitted only for serious misconduct such as theft or assault. If you were pressured into quitting (forced resignation), it may be treated as a dismissal even if it took the form of a resignation letter.
Final pay — what it includes and when it must be paid
Final pay is the total of what you earned up to your last day of work plus your statutory entitlements. The three core components are listed below; redundancy pay may be added in a redundancy, and payment in lieu of notice may be added if you did not work out the notice period. Because the amounts for each item depend on your applicable award/registered agreement, it is safest to verify them with Fair Work's official calculators.
Notice period and payment in lieu
When an employer dismisses you, they must give the minimum notice period under the NES. It is at least 1 to 4 weeks depending on your length of service, with an extra week if you are over 45 and have at least 2 years of continuous service (an award/contract may set a longer period — use the official calculator to confirm the exact period). Instead of having you work through the notice period, the employer may pay you for it (payment in lieu of notice). Summary dismissal for serious misconduct is an exception to the notice requirement, but even then outstanding wages and unused annual leave must still be paid.
- Outstanding wages — all wages up to your last day of work, including penalty rates and allowances in full
- Unused annual leave payout — a statutory entitlement under the NES, paid in full regardless of how the employment ended. If you received leave loading during employment, as a rule it is included in the payout too
- Long service leave — long-serving employees may be entitled to a payout of unused long service leave under state/territory legislation (the rules differ between states)
Unused personal/carer's leave is generally not paid out. Payment timing varies by award/agreement, and many awards require payment within 7 days of the employment ending — check the rule for your award with the Fair Work Ombudsman.
Unfair dismissal — eligibility and the 21-day deadline
If your dismissal was harsh, unjust or unreasonable, you can apply to the Fair Work Commission (FWC) for an unfair dismissal remedy. The most important thing is the deadline — you must lodge within 21 calendar days of the date the dismissal took effect, and if you miss it, it cannot be recovered unless exceptional circumstances are established. General protections applications involving dismissal — for example, retaliation for discrimination or exercising a workplace right — are also subject to the same 21-day deadline.
- Minimum employment period — 6 months at a regular business, or at least 12 months at a small business with fewer than 15 employees
- Coverage — you are covered by an award/registered agreement, or your annual earnings are below the high income threshold (the figure is updated every July — check the official website)
- Evidence of the effective dismissal date — keep the dismissal letter, emails and text messages so the start of the 21-day period is clear
Temporary visa holders (working holiday, student and others) can apply on exactly the same basis regardless of visa status. Do not give up your rights because of your visa.
The 4 types of employment termination — what you receive differs
What you can receive and what you can challenge depends on how the employment ends. Start by working out which situation applies to you.
You leave after giving the notice period set in your award/contract. Your rights to outstanding wages and unused annual leave payout are the same as in a dismissal. If you were pressured into resigning, it may be treated as a dismissal — keep a record of the circumstances.
Your employer dismisses you after giving the minimum NES notice period or paying payment in lieu of notice. If you believe the reason or process was unfair, you can apply to the FWC for a remedy within 21 days.
Immediate dismissal without notice, permitted only for serious misconduct such as theft or assault. Even here, outstanding wages and unused annual leave must be paid, and if the misconduct finding was unjustified you can likewise apply within 21 days.
Employment ends because the job itself no longer exists. Redundancy pay based on length of service may be payable under the NES, but there are exceptions such as the small business exemption — check the amount with Fair Work's official calculator. If the job did not actually disappear (i.e. it is not a genuine redundancy), you may have grounds to challenge it as unfair dismissal.
5-point checklist right after your employment ends
If you have been given notice of dismissal or decided to resign, rather than reacting emotionally, secure your records and deadlines in the following order.
- Secure written records — back up the dismissal/resignation notice, employment contract, payslips and time records somewhere outside the company, such as your personal email
- Confirm the effective dismissal date and mark the 21-day deadline on your calendar — you can decide later whether it was unfair, but the deadline must be protected first
- Request an itemised final pay statement and verify the outstanding wages, unused annual leave and notice components with Fair Work's calculator (P.A.C.T.)
- If you confirm non-payment or underpayment, request it from your employer in writing, and if unresolved, ask the Fair Work Ombudsman for help (see the workplace issues reporting guide)
- If you believe it was unfair dismissal, lodge Form F2 online with the FWC within 21 days — there is an application fee, and a waiver can be requested in cases of serious financial hardship
5 warnings and common mistakes
These are mistakes that actually happen often when employment ends. The first one, in particular, cannot be undone.
- Missing the 21-day deadline — the most common case is trying to 'gather all the evidence before applying' and running out of time. Lodge the application first and add material during the process
- Giving up on reporting out of visa worries — your workplace rights do not depend on your visa, and there are protections in place for asking the Fair Work Ombudsman for help
- Expecting a payout of unused sick leave — sick leave is generally not paid out, so the right approach is to use it when you need it during employment
- Signing a resignation letter under pressure — a forced resignation can also be treated as a dismissal, but the burden of proof becomes heavier, so record the circumstances (conversations, emails) before you sign
- Not checking your final payslip and income statement — there may be ETP classification or withholding errors, so check your income statement on myGov and contact the ATO or a registered tax agent if anything looks wrong
Useful official links
- Fair Work Ombudsman — Final pay(opens in a new window)
Official guidance on what final pay includes and when it must be paid — check the rules for unused annual leave payout
- Fair Work Commission — Unfair dismissal(opens in a new window)
Official guidance on unfair dismissal remedies — eligibility, the 21-day deadline and the process
- Fair Work — Notice & Redundancy Calculator(opens in a new window)
Official calculator for working out notice periods and redundancy pay based on your award
- Fair Work Ombudsman — Redundancy(opens in a new window)
Official guidance on redundancy — requirements, redundancy pay and the small business exemption
- Australian Taxation Office (ATO)(opens in a new window)
Australian Taxation Office guidance on tax when employment ends (ETPs and tax on unused leave payouts)
Frequently Asked Questions
When does the 21-day unfair dismissal deadline start?▾
You must lodge with the Fair Work Commission within 21 days, counted in calendar days starting from the day after your dismissal takes effect. Late applications are accepted only where exceptional circumstances are established, and the bar is very high — in practice, a missed deadline is very hard to recover from. Even if you are unsure whether the dismissal was unfair, it is safer to lodge within the deadline first and add material later.
Do I get all of my unused annual leave paid out?▾
Yes. Under the NES (National Employment Standards), unused annual leave must be paid out in full regardless of how the employment ended — whether you resigned or were dismissed. If you received leave loading when taking annual leave during employment, as a rule it should also be included in the payout. To work out the exact amount, use Fair Work's Pay and Conditions Tool (P.A.C.T.).
Can I get unused sick leave paid out too?▾
As a rule, unused personal/carer's leave is not paid out when employment ends. Some registered agreements or individual contracts may contain exceptions, so check your own award, agreement or contract. Sick leave is an entitlement to use when you need it during employment — see the leave entitlements guide for details.
By when should I receive my final pay?▾
It depends on your applicable award/registered agreement, and many awards require payment within 7 days of the employment ending. Where there is no specific rule, payment by the next regular pay day at the latest is common practice. Check the exact rule for your award on the Fair Work Ombudsman website.
I worked at a small business with fewer than 15 employees — can I still apply for unfair dismissal?▾
Yes, you can. However, for a small business with fewer than 15 employees the minimum employment period is 12 months (6 months for other businesses), and if the employer followed the Small Business Fair Dismissal Code the dismissal may be found to be fair. Small businesses are also generally exempt from the NES obligation to pay redundancy pay (some awards contain exceptions). Check the official guidance on how the employee headcount is determined for your workplace as well.
I'm on a working holiday or student visa — can I still apply?▾
Yes. Under Australian workplace law, minimum employment standards and the right to apply for an unfair dismissal remedy apply equally regardless of your visa type or status. Even if you are worried about a visa condition breach, there are protections in place that let you ask the Fair Work Ombudsman for help (check the official website for the latest details) — do not give up your rights because of your visa.
How is tax applied to my termination payments?▾
It differs by item. Payouts of unused annual leave and long service leave are not ETPs (employment termination payments) and are taxed under separate rates, while some items — such as payment in lieu of notice or the portion of a genuine redundancy payment above the tax-free limit — are classified as ETPs with their own caps and tax rates. Individual circumstances vary widely, so check the ATO guidance and consult a registered tax agent for the details.