Casual loading is an additional percentage (typically 25%) paid to casual employees to compensate for lack of leave entitlements.
Legislation: Fair Work Act 2009; Modern Awards | Category: Wages & Payment
What is Casual Loading?
Casual loading is an additional percentage paid to casual employees on top of the minimum hourly rate to compensate for the lack of entitlements available to permanent employees. The standard casual loading under most Modern Awards is 25%, though some awards specify different rates.
The loading is intended to compensate for lack of paid annual leave, personal leave, notice of termination, and redundancy pay. It is calculated on the base hourly rate before other loadings and penalties are applied.
Key Compliance Points for Employers
- The casual loading must be clearly identified in pay records and on payslips
- Loading applies to all hours worked, including overtime (unless award specifies otherwise)
- If a casual converts to permanent, they lose the loading but gain leave entitlements
- Casual loading does not offset against overtime rates or penalty rates — these are in addition to loading
- Enterprise agreements may specify different casual loading rates but must pass the BOOT
Frequently Asked Questions
What is Casual Loading?
Casual loading is an additional percentage (typically 25%) paid to casual employees to compensate for lack of leave entitlements.
Why is Casual Loading important for employers?
Understanding casual loading helps employers comply with Australian employment law, avoid penalties, and maintain fair workplace practices.
