How leave loading works
Leave loading is an extra payment — commonly 17.5% — on top of your ordinary pay for a period of annual leave. Unlike the 4 weeks of annual leave itself, it isn't guaranteed by the National Employment Standards: it only applies if your award, enterprise agreement or employment contract specifically includes it. The idea, historically, is to make up for the loss of overtime and penalty rates you'd otherwise have earned by being at work instead of on leave.
| Component | How it's calculated |
|---|---|
| Ordinary leave pay | Weekly base pay × weeks of leave |
| Leave loading | Ordinary leave pay × loading rate (commonly 17.5%) |
| Tax | Added to your annual taxable income, taxed at your marginal rate |
Source: Fair Work Ombudsman on annual leave loading in awards and agreements. Some awards pay a flat per-week amount instead of a percentage, or whichever is higher out of the loading and lost penalty rates — check your specific award if unsure.
Questions people actually ask
Do I automatically get leave loading?+
No. Unlike the 4 weeks of annual leave itself, leave loading isn't an NES entitlement — you only get it if your award, agreement or contract includes it. Check your payslip or agreement, or toggle "No / not sure" above.
Is leave loading taxed?+
Yes, it's assessable income taxed at your marginal rate. Many payroll systems won't withhold PAYG tax on the first $320 of genuine leave loading in a year under an ATO concession, but it's still income you declare at tax time.
Is 17.5% the rate everyone gets?+
It's the most common rate, but not universal. Some agreements set a different percentage or a flat weekly amount, and some pay whichever is higher out of the loading or lost shift/weekend penalty rates. Change the rate field above to match your own award.