Annual Leave Loading: How It Works & Who Gets It
Leave loading is an extra payment on top of base pay while an employee is on annual leave, and where an award or agreement provides it, it is usually 17.5% of the base rate. It is not an NES entitlement, so whether you get it depends on your award, enterprise agreement or contract. This guide explains who gets leave loading, how to work it out and what employers must record.
- It is not part of the National Employment Standards. It applies only where an award, enterprise agreement or contract provides it.
- Where it applies, the loading is usually 17.5% of the base rate while the employee is on annual leave.
- Casual employees do not get paid annual leave, so they get no loading on leave. They receive the 25% casual loading instead.
- Modern award minimum rates rose 4.75% from the first full pay period on or after 1 July 2026, so check that your leave rate uses the updated base rate.
Leave loading: rates and rules
Confirm the loading for your classification in the free Fair Work Ombudsman pay guide.
| Item | Rule or figure | Applies from |
|---|---|---|
| Loading under the NES | Not an NES entitlement | Ongoing |
| Loading where an award or agreement provides it | Usually 17.5% of the base rate | As set by the award or agreement |
| Annual leave, full-time | 4 weeks paid per year, pro rata for part-time | NES, ongoing |
| Annual leave, some shiftworkers | 5 weeks paid per year | NES, ongoing |
| Casual loading | 25% under most awards, paid instead of leave. Some awards pay the greater of leave loading or penalty rates | Award, ongoing |
| Modern award minimum rates | Up 4.75% | First full pay period on or after 1 July 2026 |
| National minimum wage | $26.44 per hour or $1,004.90 per 38-hour week | First full pay period on or after 1 July 2026 |
| Super guarantee | 12% of ordinary time earnings | 2026-27 |
Who gets leave loading
Most private-sector employees are in the national system under the Fair Work Act 2009 (Cth). NSW state public sector employees, and some local government employees, are in the NSW state system.
| Employment type | Leave loading |
|---|---|
| Full-time employee | Paid only if the award, agreement or contract provides it, usually 17.5% of the base rate. |
| Part-time employee | Same rule as full-time, applied to the hours of leave taken. |
| Casual employee | No paid annual leave, so no loading on leave. The 25% casual loading is paid instead. |
| Employee on the national minimum wage, no award | No loading unless the contract provides it. The $26.44 hourly minimum applies from 1 July 2026. |
| Labour hire worker | Employed by the labour hire provider, so the provider pays the leave and any loading. |
How to calculate leave loading
A Monday-morning pay run check often finds a base rate not updated after 1 July.
- Find the employee's award, classification and employment type, and open the Fair Work Ombudsman pay guide.
- Check whether the award or agreement provides leave loading, and read how it is worded.
- Take the current base hourly rate, which includes the 4.75% award increase if the award rose from 1 July 2026.
- Multiply the base rate by the hours of annual leave taken to get the normal leave pay.
- Work out the loading, usually 17.5% of the base rate for those hours, and compare it with any shift or penalty rates the award requires.
- Pay whichever amount the award says applies, then add super at 12% of ordinary time earnings.
| Worked example | How it works |
|---|---|
| Full-time employee, award with loading | The employee takes 1 week of leave. Normal pay for that week is the base rate for 38 hours, and the loading adds 17.5% of that amount. |
| Full-time employee, no loading | The employee takes 1 week and is paid the base rate for the ordinary hours they would have worked, with nothing added. |
| Casual employee | The employee takes no paid leave. The 25% casual loading is already built into the hourly rate. |
Employer obligations for leave loading
The records must show how each amount was reached.
- Check each award for whether the loading is payable and whether it is the greater of loading or penalty rates.
- Show the leave hours and the loading as separate lines on the payslip, and issue it within 1 working day of payday.
- Keep time and wage records for 7 years, including leave requests and approvals.
- Use the updated base rate from the first full pay period on or after 1 July each year.
- Pay super at 12% on ordinary time earnings so it reaches the fund within 7 business days of payday.
- Report payroll information to the ATO through Single Touch Payroll on or before each payday.
- Pay out unused annual leave, and any loading the award requires on it, in the final pay.
Worker rights and what to do if you are underpaid
If your leave pay looks short, act early and keep your records.
- Check your award and classification, then find the leave loading wording in the Fair Work Ombudsman pay guide.
- Compare your payslip with the guide, including the hours of leave, the base rate and any loading.
- Raise the difference with your employer in writing, and keep a copy of your payslips and leave approvals.
- Ask for any shortfall to be paid in the next pay run, with a written explanation.
- If it is not fixed, contact the Fair Work Ombudsman on 13 13 94 for free advice.
Common mistakes to avoid
- Treating the loading as an NES entitlement, when it only applies if an award, agreement or contract provides it.
- Paying the old base rate after 1 July, so the loading is calculated on an outdated figure.
- Paying casuals a leave loading as well as the 25% casual loading, or leaving the casual loading off.
- Ignoring the shift or penalty comparison where the award pays whichever is higher.
- Leaving the loading off the final pay when unused annual leave is paid out at the end of employment.
- Failing to keep records of the rate and hours used, which leaves nothing to rely on in a dispute.
Leave loading FAQ
Is it compulsory?
No. Annual leave loading is not an NES entitlement. It applies only where an award, enterprise agreement or contract provides it, and it is usually 17.5% of the base rate. Check the Fair Work Ombudsman pay guide for your award.
What is the leave loading rate?
Where an award or agreement provides it, the rate is usually 17.5% of the base rate. Some awards pay the greater of the loading or the shift and penalty rates you would have earned, so read the award wording.
Do casuals get a loading on leave?
No. Casual employees do not get paid annual leave, so there is no leave to load. Instead they receive a casual loading, which is 25% under most awards and for award-free casuals on the national minimum wage.
Is leave loading paid when I resign?
Unused annual leave is paid out in your final pay when employment ends. Whether the loading is paid on that balance depends on your award or agreement, so check the wording or ask the Fair Work Ombudsman.
Next step: get your leave loading right
Confirm each worker's award and base rate before the next pay run, and read our main guide on how to calculate annual leave for the full entitlement rules. At TQN Personnel, we place and pay labour hire workers across Sydney and can help you find workers or register for work. This is general information, not legal, tax or financial advice, so check the Fair Work Ombudsman, the ATO or an employment lawyer for your situation.