What is annual leave loading?

Some employees are entitled to leave loading when they take time off work. So, what is leave loading and are you eligible for it?

Image: Kerlon/Shutterstock.com

Some employees are entitled to leave loading when they take time off work. So, what is leave loading and are you eligible for it?

Every full-time employee in Australia is entitled to at least four weeks (20 business days) of paid annual leave per year they’ve worked; with part-time employees entitled to pro-rata paid leave. Shift workers may be entitled to more. The amount you will be paid on leave may vary depending on whether you are eligible for leave loading or not. This payment is called leave loading or recreational leave loading.

What is annual leave loading?

Under Australian law, you’re entitled to be paid at your normal rate of pay during your holiday leave, but some employees receive an additional loading percentage on top of their weekly wage, depending on their industrial award, enterprise agreement or the employer. This additional pay is known as leave loading. Unlike paid leave, leave loading is not an automatic entitlement under the National Employment Standards (NES) and the Fair Work Act 2009.

How is leave loading calculated?

Leave loading is usually an extra 17.5% on top of an employee’s normal wage for the time period taken off, or the greater of weekend or shift penalty rates and the national standard. According to Australian Unions, ‘if you’re eligible, you’ll usually receive your ‘leave loading payment included in the same payment as your annual leave. This will usually be made as a standard, regular pay and may be receivable during or after your leave date.’

Who gets annual leave loading?

Leave loading is a legal entitlement in some industry awards and some employer based enterprise agreements. An award is a legal document setting out minimum rates of pay and employment conditions for a particular industry. According to Fair Work Australia, there are more than 100 different awards across Australia. The number of agreements across Australia are many and sit with each employer.

Some examples of industries with selected awards featuring leave loading include: building and construction, manufacturing, hospitality, hair and beauty and real estate. The Fair Work Ombudsman website includes advice about which awards cover different jobs, and eligibility for leave loading entitlements. If your award, enterprise agreement or employer based contract does not state that leave loading must be paid, speak with your employer or your union for more details.

Generally speaking, if your job is covered by an award or enterprise agreement that entitles you to leave loading, you won’t lose this entitlement simply by signing an employment contract.

How do I get annual leave loading?

If you’re eligible, you will usually receive your leave loading payment at the same time as your annual leave pay. This is usually received in your standard pay, whether this is paid by your employer before, during or after your time away.

Superannuation is also payable on annual leave loading, unless the loading is linked to a lost opportunity to work overtime, based on a ruling by the Australian Taxation Office (ATO).

Do you get leave loading as a payout if you quit your job?

Annual leave loading that accumulates, and isn’t used, is paid out to eligible employees in their final pay if they resign or end their employment. The Fair Work Ombudsman has a pay calculator that you can use if you need to work out any money owed to you, such as leave entitlements, for a final pay payment.

If you are changing jobs, you might also be interested in finding out more about the latest changes to the Superannuation Guarantee: the contribution that’s regularly made into your super fund by your employer to help bolster retirement savings and supplement the Age Pension.

Image source: Kerlon/Shutterstock.com

This article was reviewed by our Editor-in-Chief Nina Rinella before it was updated, as part of our fact-checking process.

Mandy Beaumont

Former Content Lead

Former Content Lead, Mandy Beaumont, has had a long career in the publishing and university sector as an award-winning author, journalist and creative writing academic. She’s been a course convenor in creative writing and communications at Griffith University for more than a decade, holds a PhD and a master’s in creative writing from RMIT and QUT respectively, and has written for The Big Issue, Melbourne Writers Festival, the Australian Council of Trade Unions the Queensland Nurses and Midwives’ Union, as well as many other well-known newspapers and journals in Australia and overseas. Mandy’s short fiction writing and her novels have won, been shortlisted and longlisted for prestigious prizes and awards such as The Stella Award, the QLD Literary Awards, the Richell Prize, the Dorothy Hewitt Award and the MOTH International Short Story Award. Mandy released a new novel with one of Australia’s largest publishing houses, Hachette Publishing in early 2025 called The Thrill of It. After many years of working with trade unions and renting, Mandy has a keen interest in superannuation (particularly worker’s capital) and the housing market in Australia.