Leave Loading
Last updated October 2026
Reviewed by the Australian Unions policy team, October 2026
Leave loading is an extra payment given on top of annual leave pay.
Also known as holiday loading or annual leave loading, it is one of the many important leave entitlements union members have fought for and won.
What is leave loading?
Leave loading is an extra payment paid on top of your annual leave pay. The labour movement first achieved this in the 1970s to compensate workers who relied on overtime and increased penalty rates, ensuring they received a similar pay rate during their time off.
While paid annual leave is a minimum entitlement for Australian employees under the National Employment Standards (NES), leave loading is not. This means your entitlement to leave loading depends on the specific modern award or enterprise agreement that covers your workplace. As of 2026, leave loading is still a common and important entitlement for many workers.
How Much is Leave Loading?
Depending on your award or agreement, leave loading is usually around 17.5% extra pay on top of your annual leave pay.
If you are terminated from your employment, you are usually entitled to be paid out for both annual leave and annual leave loading.
Who is entitled to leave loading?
Your eligibility for leave loading depends on the industrial instrument that covers your employment.
Award-covered workers
Most modern awards include a provision for annual leave loading, typically at 17.5%. It is essential to check the specific clauses in your award to confirm your entitlement, the percentage, and any conditions that may apply.
Enterprise agreement (EBA) workers
If you are covered by an Enterprise Bargaining Agreement (EBA), your entitlement to leave loading will be specified within that agreement. Union-negotiated EBAs often preserve or improve upon award entitlements, so it’s common for leave loading to be included. Always check your specific EBA.
Award-free workers
For workers not covered by an award or enterprise agreement (often referred to as ‘award-free’), there is no automatic entitlement to leave loading under the NES. Your entitlement depends entirely on your employment contract.
Casual workers
Casual workers do not accrue annual leave and, therefore, are not eligible for annual leave loading. Their higher hourly pay rate (casual loading) is generally understood to compensate for the absence of paid leave entitlements.
Shift workers
Some awards provide a different arrangement for shift workers. Instead of a 17.5% leave loading, they may receive a payment based on what they would have earned, including penalty rates, had they been working ordinary shifts during their leave. This is sometimes called a ‘shift worker’s comparison’ or ‘all-purpose’ rate.
How leave loading is calculated
Leave loading is usually an extra 17.5% on top of your normal wage. If you’re eligible, leave loading will be paid for the duration of your annual leave period.
The formula
The standard leave loading rate in Australia is 17.5%. It is calculated on your ordinary hours of pay, excluding extra payments like allowances, penalties, and overtime, unless your award or agreement specifies otherwise.
You can use this simple formula to calculate your annual leave loading:
Annual leave loading = (Annual leave hours taken ÷ 38 ordinary hours per week) × 17.5% × Employee’s Weekly Rate of Pay (based on ordinary hours)
Or, more simply:
Annual leave loading = (Number of weeks of annual leave taken) × 17.5% × Employee’s Weekly Rate of Pay
Worked example
Let’s say a full-time employee with an ordinary weekly rate of pay of $1,200 takes two weeks of annual leave.
Calculation:
$1,200 (ordinary gross weekly wage) x 2 (weeks of annual leave) x 17.5% = $420
So, for two weeks of annual leave, the employee would receive their normal $2,400 in wages, plus an additional $420 in leave loading.
Higher rate scenarios:
Some awards or enterprise agreements may specify that employees receive the higher of either their 17.5% leave loading or the amount they would have received from penalty rates and shift allowances had they not been on leave. This is to ensure workers are not financially disadvantaged by taking their annual holidays, especially those who regularly work weekends, evenings, or other shifts that attract higher rates. It’s crucial to check your specific award or agreement for these provisions.
When and how leave loading is paid
Leave loading is typically paid at the same time and in the same payment as your annual leave, usually falling on your standard agreed-upon pay date and period.
On annual leave taken during employment
If you are eligible, your leave loading will be included in your regular pay cycle for the period you are on annual leave. It should appear as a separate line item on your payslip, clearly showing the amount of leave loading paid.
On termination (final pay)
If you leave your job and still have accrued annual leave that is paid out in your final pay, you are usually entitled to be paid out the associated leave loading as well. This will depend on the specific terms of your award, agreement, or contract.
When you take leave in advance
If your award or agreement allows you to take annual leave in advance of it being accrued, any applicable leave loading would typically also be paid with this advance leave.
Super and tax on leave loading
Understanding how leave loading is treated for tax and superannuation purposes is important for managing your finances.
Is leave loading taxed?
The short answer is yes. Leave loading is considered part of your taxable income. It will be added to your earnings for the period and is subject to normal income tax, with Pay As You Go (PAYG) tax withheld by your employer.
If you receive your leave loading on a pro-rata basis, the leave loading payment will be added to your earnings for this period and will be taxed accordingly.
When an employee resigns, their final payment will typically include a pay-out for any untaken leave, pro-rata bonuses and notice pay, if applicable. These payments are subject to normal income tax.
Do I get super on leave loading?
As of 1 July 2026, the position on superannuation for leave loading has become clearer. Leave loading is included in Ordinary Time Earnings (OTE) for superannuation purposes unless it is considered to be compensation for a loss of opportunity to work overtime.
In practice, if your leave loading is paid to compensate you for shift penalties, weekend work, or other payments you would have received had you been working (and these payments are for your ordinary hours of work), then superannuation is generally payable on it. If it is genuinely linked to a loss of overtime earnings, then it might not be. Your employer is required to provide a record of this classification.
What to do if your payslip does not show leave loading
If you believe you are entitled to leave loading but it’s not appearing on your payslips or being paid correctly, here’s a step-by-step guide:
Step 1: Check your award
First, identify the modern award or enterprise agreement that covers your employment. Review the annual leave clause to confirm your entitlement to leave loading, the percentage, and any conditions for its payment.
Step 2: Calculate the gap
Using the formula provided above and your weekly rate of pay, perform a quick calculation to estimate how much leave loading you believe you are owed based on your annual leave taken. This will help you present a clear case.
Step 3: Raise it with payroll in writing
Politely contact your employer or payroll department in writing. A simple email might be:
I’m writing to inquire about the annual leave loading on my recent payslip for the period [Dates]. My award/agreement [Name of Award/Agreement] specifies a 17.5% leave loading, which I don’t see reflected. Could you please provide a detailed breakdown?
Step 4: Get your union involved
If you don’t receive a satisfactory response, or if you need assistance at any stage, contact your union. Unions regularly help members chase unpaid leave loading, resolve disputes over calculations, and ensure employers comply with their obligations, often free of charge.
Step 5: FWO underpayment claim
As a last resort, if the issue remains unresolved after engaging with your employer and union, you can make a formal complaint to the Fair Work Ombudsman. This could lead to an investigation and potential recovery of unpaid amounts. Learn more about underpayment and wage theft.
Leave Loading – Frequently Asked Questions
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What is recreation leave loading?
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Leave loading is an extra payment that some workers are entitled to receive from their employer while on annual leave, on top of their base rate of pay.
Leave loading acts as a top-up to your standard base pay, and is intended to compensate workers for extra expenses incurred during leave.
Leave loading was achieved as a result of the labour movement in the 1970s. It was created to support workers who relied on overpay and increased overtime rates.
Through leave loading, these workers gained access to a similar pay rate for the same time taken on leave.
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How does leave loading work?
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Leave loading is usually an extra 17.5% on top of your normal wage. If you’re eligible, leave loading will be paid for the duration of your annual leave period.
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.
Not everyone is entitled to annual leave loading, so it’s important to check with your employer, and your union, and review the details of your award or workplace agreement.
When you schedule your annual leave with your employer, ask about leave loading to confirm whether or not you are entitled, the percentage rate of your payment, and when you can expect to receive it.
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When is leave loading paid?
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Annual leave loading is usually paid at the same time that you receive payment for annual leave. An employer is not required to make any payments outside of regular pay cycles, so this payment will fall on the standard agreed upon date and period.
On completion or termination of your employment, in most circumstances, annual leave loading is to be paid out on any accrued annual leave balance.
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What is the annual leave loading rate?
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The standard leave loading rate in Australia is 17.5%.
You can use this simple formula to calculate your annual leave loading:
Annual leave loading = 4 × 17.5% × Employee’s Weekly Rate of PayYou can expect this sum to be paid to you at the same time as your annual leave payment. This breakdown should appear on your payslip for the period in question.
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Do you get leave loading on salary?
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When and how your leave loading is paid variable and can require a discussion with your employer.
Some workers may receive an annual salary. Alternative, you may receive an all-inclusive hourly pay rate that includes annual leave loading. In this case, the payment does not need to be made separately from your salary.
If you are entitled to annual leave loading, then any remaining sum must be paid out when your employment ends.
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How to calculate holiday leave loading?
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To calculate your holiday leave loading, use this simple formula:
Annual Leave Loading = 4 × 17.5% × Employee’s Weekly Rate of Pay
To calculate your pro-rata leave loading, you can use the formula below:
Annual Leave Loading = (Weeks worked ÷ 40.6 × 4 × 17.5%) × Employee’s Weekly Rate of Pay
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How is leave loading taxed?
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If you receive your leave loading on a pro-rata basis, the leave loading payment will be added to your earnings for this period and will be taxed accordingly.
When an employee resigns, their final payment will typically include a pay-out for any untaken leave, pro-rata bonuses and notice pay, if applicable. These payments are subject to normal income tax.
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Is leave loading paid on termination?
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When you resign, it’s standard practice that you’ll receive a final payment from your employer.
It’s advisable to check the calculator to confirm that you’ve received the correct sum and all final payouts that you’re entitled to.
This will include a payout for any accrued leave and leave loading if applicable. These payments are subject to normal income tax.
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Is super payable on annual leave loading?
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Annual leave loading is included in ordinary time earnings (OTE). As such, employers are required to pay superannuation contributions on this amount.
Generally, your leave loading payments are defined as in OTE because they’re related to annual leave. It is possible for an employer to decide they don’t need to pay super on annual leave loading.
This is possible if they consider the leave loading to be compensation for overtime wages that you could have earned if you’d worked during this period.
However, your employer will need to provide a record of this classification of annual leave loading. Without it, the ATO could rule that your employer has withheld super contributions and be liable to pay a fine.
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