AuAl2 is an intermetallic compound with a vivid purple colour attributable to a bulk plasmon energy in the visible part of the spectrum. However, the colour of as-deposited thin films is not as strong and only develops upon annealing. Density functional theory calculations of the dielectric function are presented for a variety of vacancy types and concentrations. The results support the view that the effect of annealing on colour is correlated with a reduction in concentration of Al vacancies. The effect of vacancies on the optical properties can be understood as arising from the complex interplay between interband transitions around the Fermi level and the plasmon energy.