Annual leave loading

Annual leave loading is an additional financial benefit that some employees receive on top of their regular pay during their annual leave. This extra payment is meant to compensate for the absence of overtime or other special allowances that an employee might usually earn. The eligibility for this benefit and the amount of the loading vary depending on the employee's award or employment agreement. It's a way to ensure employees are not financially disadvantaged during their holiday period.

Is annual leave loading compulsory?

Annual leave loading is not part of the National Employment Standards, so it only applies if the employee's award, enterprise agreement or contract provides for it. Many awards set it at 17.5% of the employee's base rate for the leave, and some instead pay the higher of the loading or the shift penalties the employee would have earned. For example, a full-time employee on $1,200 a week who takes 2 weeks of leave under an award with a 17.5% loading receives $2,400 in leave pay plus $420 in loading.

See our guide to annual leave loading for how to calculate it.