Annual leave loading is an extra payment some employees get on top of their base pay when they take annual leave. It is often 17.5%. You get it only if your award, enterprise agreement or employment contract provides it. The National Employment Standards pay annual leave at your base pay rate, with no loading.
What is annual leave loading?
The Fair Work Ombudsman describes annual leave loading as an additional amount paid to some employees when they take annual leave. It doesn't apply to all employees, and it depends on what their award or enterprise agreement says.
Annual leave itself is paid at your current base pay rate for the hours of leave you take. That leaves out overtime, penalty rates, allowances and bonuses. Awards and enterprise agreements can set a different way of paying annual leave, and can add a loading on top.
Our guide to annual leave in Australia covers how much leave you get and how it builds up.
Who gets leave loading?
It depends on what sets your pay and conditions.
- Covered by an award. Check the annual leave clause. The Clerks Private Sector Award 2020 and the Banking, Finance and Insurance Award 2020 both include a 17.5% loading.
- Covered by an enterprise agreement. Check the agreement. You can ask your employer for it or find it on the Fair Work Commission's website.
- Award and agreement free. Your entitlements come from your employment contract and the National Employment Standards. The standards pay annual leave at your base rate, so you get a loading only if your contract includes one.
Don't assume a professional job is award free. Fair Work says many managers and professionals, such as accountants and people in finance, marketing, legal, HR, PR and IT, haven't traditionally been covered by awards, and that some are covered. It suggests checking industry awards, then the Professional Award and the Miscellaneous Award.
Earning a high salary doesn't take you out of an award on its own. Awards don't apply to a high income employee, who is someone who has accepted a written guarantee of annual earnings above the high income threshold, which is $190,100 from 1 July 2026. If you earn more than the threshold without a guarantee, the award still applies. A guarantee can only be made with an employee covered by a modern award.
How much is leave loading?
The awards in Fair Work's examples, and the Clerks and Banking awards, set it at 17.5%. Many awards compare that 17.5% with the penalty rates or shift loading you would normally have earned, and pay whichever is higher.
| Award | Who | Leave loading |
|---|---|---|
| Clerks Private Sector Award | Day workers | 17.5% of the minimum hourly rate, or the minimum rate with weekend penalty rates, whichever is greater |
| Banking, Finance and Insurance Award | Day workers | 17.5% or the relevant weekend penalty rates, whichever is greater, worked out on the award minimum rate |
| Retail Award | Non-shiftworkers | 17.5% of the minimum hourly rate, or the weekend or shift penalty rates you normally get, whichever is higher |
| Storage and Wholesale Award | Shiftworkers | 17.5% of the minimum pay rate, or your usual shift loading, whichever is higher |
In Fair Work's Storage and Wholesale example, a shiftworker's usual afternoon shift loading is 15%, so on leave he gets the 17.5% loading because it is the higher of the two.
For a day worker under the Clerks or Banking award who would have worked only Monday to Friday, with no weekend penalty rates, that leaves the 17.5%.
Is leave loading worked out on your salary or the award rate?
That depends on the wording of your award or agreement. Fair Work's examples show both:
- The Building and Construction Award pays annual leave at what you would have earned for your ordinary hours, and adds 17.5% on that amount. A worker paid above the award rate gets the loading on the higher rate.
- The Hospitality Award pays 17.5% on the amount payable under the National Employment Standards, which can include an above award rate if that is your base rate of pay.
- The Clerks award sets the loading at 17.5% of the minimum hourly rate, and the Banking award works it out on the award's minimum rates. Fair Work says that where an award does this, the loading is calculated on the award rate.
Here is what that means for a full-time employee at Level 3 of the Clerks award, using the award's minimum hourly rate from 1 July 2026 and a 38 hour week:
| Clerks award Level 3, one week of annual leave | Amount |
|---|---|
| Minimum hourly rate | $31.11 |
| Minimum pay for 38 hours | $1,182.18 |
| Leave loading at 17.5% | $206.88 |
If that employee is paid $1,750 a week, the week of leave pays $1,750 at their base rate, and the loading is still $206.88, because the Clerks award works it out on the minimum rate. Under an award or agreement that calculates the loading on actual pay, the same week would carry 17.5% of $1,750, which is $306.25.
Can leave loading be built into your salary?
Yes, in some cases. Fair Work says you may not get a separate loading if it is included in:
- an annualised wage arrangement that your award or enterprise agreement allows, or
- a contractual offsetting arrangement, where an employer uses an above award salary to cover award entitlements such as the loading.
The Clerks and Banking awards both let an employer pay a full-time employee an annualised wage that covers the annual leave loading. Under both, the employer must tell you in writing, and keep a record of, the annualised wage, which award provisions it covers, and how it was calculated, including each separate component. If your salary is meant to include your loading, that written record is where to check.
All awards also include an individual flexibility arrangement clause, and under the Clerks award that can vary annual leave loading. Under that award an arrangement can only be made after you have started the job, and must be made without coercion or duress.
A contract can't leave you worse off than your award and the National Employment Standards, even if you signed it. The Fair Work Ombudsman can't advise on a specific contractual offsetting arrangement. Our guide to unpaid overtime for salaried employees covers how offsetting works with extra hours.
Do you get super on leave loading?
Usually, yes. The ATO counts annual leave loading as ordinary time earnings and qualifying earnings, so super guarantee is paid on it. The exception is leave loading that is clearly linked to a lost opportunity to work overtime, which doesn't attract super. Leave loading paid when you cash out annual leave while still employed also counts.
What happens to leave loading when you leave a job?
Your unused annual leave is paid out in your final pay, at the same amount you would have received if you had taken it. If you would have got leave loading when taking the leave, the loading must be included. That applies even if an award, enterprise agreement or contract says it doesn't.
The ATO says annual leave and leave loading paid out on a normal termination, such as resigning or retiring, are not qualifying earnings, so no super guarantee is paid on that part of your final pay. Our guide to resigning covers what goes in your final pay and when it is due.
This is general information, not legal or financial advice. Awards and agreements differ, so check the exact wording of the one that covers you.
Sources
- Fair Work Ombudsman, Payment for annual leave (base pay rate, what leave loading is, the Storage and Wholesale Award example, unused leave and loading paid out on termination even if an award, agreement or contract says otherwise, read 8 October 2026, content last updated 10 August 2026)
- Fair Work Ombudsman Library, Annual leave loading in awards and agreements (the Retail, Security, Road Transport, Building and Construction and Hospitality examples, above award rates, annualised wages, individual flexibility arrangements, contractual offsetting, read 8 October 2026)
- Clerks Private Sector Award 2020 (clause 32.3 annual leave loading, clause 16.1 Level 3 minimum hourly rate of $31.11, clause 18 annualised wages, clause 5 individual flexibility arrangements, consolidated to 1 July 2026, read 8 October 2026)
- Banking, Finance and Insurance Award 2020 (clause 22.3 annual leave loading, clause 17 annualised wages, consolidated to 1 July 2026, read 8 October 2026)
- Fair Work Ombudsman, Award and agreement free wages and conditions (entitlements come from the contract and the NES, managers and professionals, contracts can't go below minimums, high income threshold of $190,100 from 1 July 2026, read 8 October 2026, content last updated 25 September 2026)
- Fair Work Ombudsman Library, High income employees and a guarantee of annual earnings (awards don't apply to employees with a guarantee, do apply above the threshold without one, read 8 October 2026)
- Australian Taxation Office, What payments are qualifying earnings (annual leave loading, loading linked to lost overtime, cashed out leave loading, leave and loading paid on a normal termination, read 8 October 2026, last updated 2 September 2026)
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