Hack to turn annual leave into extra cash

As the cost of living crisis grips Australia, there’s a new way for 4.2 million workers to access money they’re earned that “most Aussies don’t know about”.

As the cost of living crisis continues to grip Australia, there’s a new way for 4.2 million workers to access money they’re earned that many have no idea about.

Faced with the rising cost of living and a $6,000 credit card debt, Sydney marketing co-ordinator, Ted, 29, saw an ad on Instagram offering him the opportunity to convert his annual leave into cash.

The ad, from fintech platform Subi, required him to upload a pay slip and supply his manager’s name.

He subsequently received a notification confirming that his request had been approved, with almost $2,000 hitting his account around 12 hours later.

He told news.com.au he had built up a substantial amount of annual leave during Covid when it was difficult to take a holiday.

“I knew I wasn’t going on a holiday anytime soon and the bills were piling up,” he said.

“It’s such an obvious thing that most Aussies don’t know they can cash out.”

Subi co-founders Glenn Rosen and Max Moran.

The brainchild of former schoolteacher and CEO Max Moran, 28, and co-founder Glenn Rosen, who is also the founder of Sydney electrical and trade services business Glenco, Subi was in development for more than three years before its launch last month.

Mr Moran describes the platform as a great solution for both workers with large annual leave balances struggling with the rising cost of living, and businesses who have to carry the cost of accrued annual leave as a liability on their balance sheets.

“It’s a win-win scenario for employers and employees as it not only empowers individuals to access earned funds on their terms but also benefits businesses by offering options to staff.”

To use Subi, employees must have more than 20 days, or 152 hours, of annual leave accrued, and must maintain a balance of 20 days after cashing some leave out.

For example, a worker with 21 days of annual leave can cash out one day of leave, while a worker with 30 days of accrued leave could cash out 10 days.

Roy Morgan research shows that on average, 30 per cent of Aussie workers have an annual leave balance of greater than 20 days.

“There are 4.2 million Aussies who could cash out on their annual leave, but current processes are too hard to navigate for people,” Mr Moran said.

He added that the average Aussie has a balance of 27 days of annual leave and those additional seven days would translate into an average cash value of about $2,500.

Subi helps employees cash out their annual leave, and the service is currently free.

Subi is currently being offered free for both employees and employers, and since its launch Mr Moran told news.com.au the company has processed 190 employee applications, with the average amount of cash being paid out so far coming in at $1,500.

“Australians have a clear appetite to utilise cash out of their extra annual leave while times are financially challenging,” he said.

So far, 10 businesses have signed up for the service, offering them an employee perk they can use to attract and retain staff, as well as giving them an alternative to carrying the cost of annual leave on their books or forcing employees to take leave.

Mr Moran said that eventually the service will move to a flat-fee payment model, but the amount is still to be determined and no date has been set for its introduction.

“Whether you cash out $2,000 or $10,000 – this flat fee will still be a much more affordable option than high-interest credit cards or loaning service,” he added.