Casual loading is the extra pay Australian casual employees get instead of entitlements like paid annual leave and paid sick leave. The Fair Work Ombudsman says that generally, casual loading is an extra 25% of the minimum hourly rate, though the exact rate comes from the award, agreement or contract that applies.
It isn't a bonus. It's compensation for what casuals give up. This guide explains where the 25% figure comes from, what the loading replaces, how it interacts with penalty rates, and what happens when a casual becomes permanent, using the Fair Work Ombudsman's pages as they read in October 2026.
Why casuals get a loading
The Fair Work Ombudsman's guide to casual employment is plain about it: casuals don't get all the same entitlements as full-time and part-time employees, so they're paid extra to compensate. A person can only be a casual employee if they're entitled to a casual loading or a specific casual pay rate under an award, enterprise agreement or contract. In other words, the loading is part of what makes someone a casual in the first place.
What the loading replaces
| Entitlement | Full-time and part-time | Casual |
|---|---|---|
| Paid annual leave | Yes | No |
| Paid sick and carer's leave | Yes | No; 2 days unpaid carer's leave per occasion |
| Paid compassionate leave | Yes | Unpaid |
| Notice of termination | Yes | No |
| Redundancy pay | Yes | No |
| Long service leave | Yes | In some states and territories, for long-serving casuals |
The Fair Work Ombudsman notes that casuals don't get most types of paid leave, notice of termination or redundancy pay, even if they work regularly for a long time. That's the trade the loading is meant to cover.
How the 25% works in practice
- Start from the minimum hourly rate in the award or agreement that covers the job.
- Add the casual loading the instrument sets, generally 25%.
- Apply any penalty rates the award sets for weekends, public holidays or overtime.
- Check the result against the award, because some awards build the loading into the penalty rate.
For award-free work, the National Minimum Wage is $26.44 an hour from 1 July 2026, as of October 2026, and casual pay is calculated from the minimum rate. The Fair Work Ombudsman's Pay and Conditions Tool shows the exact casual rate for each award.
Loadings and penalty rates: the double-count trap
This is where payroll mistakes happen. Some awards express weekend and public holiday rates for casuals as a single figure that already includes the casual loading. The Fair Work Ombudsman's example is a casual bartender under the Hospitality Award, who gets 250% of the ordinary hourly rate on a public holiday, inclusive of the casual loading. Adding a further 25% on top of that would overpay; paying the permanent rate would underpay. Read the award clause, not a rule of thumb.
Who's a casual, and when it changes
A person is a casual if, when they start, there's no firm advance commitment to ongoing work. A regular pattern on its own doesn't make someone permanent. But casuals do have a route out:
- Under the employee choice pathway, eligible casuals can give written notice to become permanent after at least 6 months, or 12 months with a small business.
- The employer must respond in writing within 21 days, and can only refuse for certain reasons.
- If the change goes ahead, the casual loading stops and paid leave starts accruing.
- Casuals employed on a regular and systematic basis for at least 12 months can also request flexible working and take unpaid parental leave.
My guide to casual conversion explains the employee choice pathway step by step, and for the separate loading paid on annual leave, see my annual leave loading guide.
What casuals still get
The loading replaces some entitlements, not all of them. According to the Fair Work Ombudsman, casual employees still get:
- Superannuation. Generally, all employees are eligible for the superannuation guarantee, casuals included.
- An unpaid day off on a public holiday they'd normally work, and the right to refuse a public holiday shift if it's reasonable to do so.
- Overtime and penalty rates where the award or agreement provides them.
- 2 days of unpaid carer's leave and 2 days of unpaid compassionate leave each time they're needed.
- Long service leave in some states and territories, for long-serving casuals.
Since 26 August 2024 there are also limits on hiring casuals on fixed-term contracts in higher education, where staff are covered by the higher education awards. Casuals employed on a fixed-term contract before that date aren't affected.
My verdict
Think of casual loading as leave and job security paid in cash up front. For a short or irregular role, 25% extra can be the better deal. For someone working the same shifts week after week for years, it often isn't, and that's exactly the situation the employee choice pathway was built for. Employers: always check the award before adding the loading to penalty rates.
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The entitlement a casual gives up in return for the loading is explained in annual leave.
Frequently asked questions
How much is casual loading in Australia?
The Fair Work Ombudsman says casual loading is generally an extra 25% of the minimum hourly rate. The exact figure comes from the award, agreement or contract.
Do casuals get annual leave?
No. Casuals don't get paid annual leave, paid sick leave, notice of termination or redundancy pay. The casual loading compensates for this.
Is casual loading added on top of penalty rates?
It depends on the award. Some awards set a casual penalty rate that already includes the loading, such as 250% on public holidays under the Hospitality Award.
Do casuals get paid for public holidays in Australia?
No. The Fair Work Ombudsman says casuals get an unpaid day off if they'd normally have worked that day, and can refuse a public holiday shift if it's reasonable to do so.
Do casuals get superannuation?
Yes. The Fair Work Ombudsman says that generally all employees are eligible for the superannuation guarantee, and casual employees are entitled to it like everyone else.
Is a regular pattern of shifts enough to make a casual permanent?
No. The Fair Work Ombudsman says a regular pattern of work on its own doesn't show a firm advance commitment to ongoing work, so someone with regular shifts can still be a casual.
Does casual loading stop if I become permanent?
Yes. A casual who changes to full-time or part-time employment stops receiving the loading and starts accruing paid leave.
