- Annual leave loading at a glance
- Who gets annual leave in the first place
- How leave loading works for a shiftworker
- How to check whether you're owed leave loading
- Leave loading when your job ends
- Sick while on annual leave
- For employers: getting it right
- Why the award matters more than the contract
- The verdict
- Frequently asked questions
Annual leave loading is an extra amount paid to some Australian employees on top of their base pay when they take annual leave. It isn't a universal right: the Fair Work Ombudsman says it only applies if your award or enterprise agreement says so. Where it does, it's often 17.5% of the minimum pay rate, or for shiftworkers the higher of 17.5% or their usual shift loading.
The baseline under the National Employment Standards is simply annual leave paid at your current base pay rate, without extras such as bonuses. Leave loading sits on top of that, and only for people whose award or agreement includes it. Everything here comes from the Fair Work Ombudsman's annual leave pages.
Annual leave loading at a glance
| Question | Answer |
|---|---|
| Is everyone entitled? | No. It depends on your award or enterprise agreement |
| Typical amount | 17.5% of the minimum pay rate, where the award provides it |
| Shiftworkers | Often the higher of 17.5% or their normal shift loading, depending on the award |
| Paid on leaving? | Yes, if you'd have got it when taking leave, even if a contract says otherwise |
| Casual employees | Casuals don't get paid annual leave, so no leave loading |
Who gets annual leave in the first place
All employees except casuals get paid annual leave under the NES: 4 weeks a year for full-time and part-time staff, based on ordinary hours. Fair Work's example: Jane works 20 hours a week part-time and builds up 80 hours of annual leave over the year, the equivalent of 4 weeks for her. Some shiftworkers get an extra week if their award defines them that way. Awards and agreements can give more than the NES, never less. See our guide to the National Employment Standards for the full list.
Leave builds up from the first day, including during probation, and unused leave rolls over each year. It keeps accumulating on paid leave, community service leave including jury duty, and long service leave, but not on unpaid leave or unpaid parental leave. Government Paid Parental Leave doesn't count as paid leave for this purpose.
How leave loading works for a shiftworker
The Fair Work Ombudsman's example: Alex works full-time on five afternoon shifts a week in a warehouse, under the Storage and Wholesale Award. His award gives annual leave loading at the higher of 17.5% of his minimum pay rate or the shift loading he normally gets. His afternoon shift loading is 15%.
| Option | Loading |
|---|---|
| Annual leave loading | 17.5% |
| His usual afternoon shift loading | 15% |
| What he's paid on leave | Base pay rate plus 17.5%, because it's the higher of the two |
The point of the 'higher of' rule is that shiftworkers aren't worse off on holiday than at work. If Alex's shift loading had been higher than 17.5%, he'd be paid that instead.
How to check whether you're owed leave loading
- Find your award or enterprise agreement. The Fair Work Ombudsman's industry filter and Find my award tool help here.
- Look for the annual leave clause and whether it mentions annual leave loading.
- Check the rate, and whether it's worked out on the minimum pay rate or something else.
- If you're a shiftworker, check whether the loading is the higher of the leave loading or your shift loading.
- Compare it with your payslip for a week of annual leave.
Leave loading when your job ends
When employment ends, employers must pay out any unused annual leave, and the payment must match what the employee would have got if they'd taken the leave. So if leave loading or other payments would have applied, they must be included in the final pay. The Fair Work Ombudsman stresses that this applies even if an award, enterprise agreement or employment contract says it doesn't. That's the rule employers most often get wrong.
Sick while on annual leave
If you get sick or injured during annual leave, you can use paid sick or carer's leave instead of annual leave for those days. Your employer can still ask for notice and evidence, but can't direct you to take annual leave while you're on sick or carer's leave.
For employers: getting it right
- Check each award or agreement you use, because loading isn't the same everywhere.
- Pay annual leave at the current base pay rate, plus loading if it applies, and leave bonuses out unless the award says otherwise.
- Build the loading into final pay calculations automatically.
- Keep leave records that show hours accrued, taken and paid.
If you track leave in software, our PTO tracker roundup covers tools that log accrual and payouts. Annual leave loading is also separate from long service leave, which is set by each state's law rather than by awards in the same way.
Why the award matters more than the contract
The Fair Work Ombudsman's position is that awards and enterprise agreements can set a different method of payment for annual leave and can require leave loading. That's why the same job title can come with leave loading at one business and without it at another: the deciding factor is the award or agreement that covers the work, not the job advert or the offer letter.
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If you're not sure which award covers you, start there before arguing about the loading. Once you know the award, the annual leave clause usually answers the question in a few lines.
Casual staff in Australia may also wonder about moving to permanent work, and for that I'd point you to my breakdown of casual conversion in Australia.
The verdict
Don't assume you have leave loading, and don't assume you don't: read the annual leave clause in your award. If it's there, it's usually 17.5%, it beats a lower shift loading, and it has to be paid out on any unused leave when you leave, whatever the contract says.
A related idea is taking time off instead of overtime, which I explain in my guide to time off in lieu.
Frequently asked questions
What is annual leave loading?
An extra payment some employees get on top of their base pay when they take annual leave, if their award or enterprise agreement provides it.
How much is annual leave loading?
Where an award provides it, it's often 17.5% of the minimum pay rate, as in the Fair Work Ombudsman's Storage and Wholesale Award example.
Is annual leave loading paid out when you resign?
Yes, if you'd have received it when taking leave. Unused leave must be paid out at the same amount, including loading.
Do casual employees get annual leave loading?
No. Casual employees don't get paid annual leave under the NES.


