No. A casual employee earns no paid annual leave under the Fair Work Act, no matter how many years or how steady the shifts. They are paid a casual loading instead, 25% in the awards we checked. Part-time employees are not casuals, and they do get annual leave, pro rata.
Most answers stop at that no. This guide shows the two sections of the Act that produce it, puts a dollar figure on the part of a casual rate that stands in for annual leave, and covers what happens to your leave when you go permanent, or when it turns out you were never really casual.
Key takeaways
- Section 86 switches off the NES annual leave rules for casuals, and s 87 leaves casual periods out of the service that earns leave. Nothing accrues, so there is nothing to lose or cash in.
- The loading is paid instead of the six entitlements listed in s 545A(4), not annual leave alone.
- At the 2026 national minimum wage of $26.44 an hour, 4 weeks of leave is worth 8.33% of pay for hours worked (9.79% with a 17.5% leave loading), about a third of a 25% loading.
- Going permanent starts your annual leave balance at 0 hours. Casual years can still count toward long service leave, but not toward annual leave or NES notice.
- If you were never really casual you can claim the leave, and s 545A lets a court offset the loading already paid. That offset can reach nil, but the court may instead deduct only a proportion of the loading.
Why casuals accrue no annual leave
Two sections of the Act shut casuals out, one after the other. Section 86, which opens the annual leave Division of the NES, says the Division "applies to employees, other than casual employees". Section 87 then counts only years of service "other than periods of employment as a casual employee", both for the 4-week entitlement and for the way it builds up through the year. A casual does not earn leave that later vanishes. No leave is earned at any point.
Awards repeat the rule. The Retail and Hospitality awards each begin their annual leave clause by pointing to the NES and adding: "It does not apply to casual employees." The Fair Work Ombudsman and business.gov.au give the same answer.
Who counts as a casual is decided by s 15A. You are casual if, when you start, there is no firm advance commitment to continuing and indefinite work and you are entitled to a casual loading or a specific casual rate. A part-time employee has that commitment, so they accrue the full 4 weeks a year in proportion to their ordinary hours. The part-time annual leave calculator turns a part-time roster into hours of leave.
Fair Work Act 2009 s 86: "Division applies to employees other than casual employees. This Division applies to employees, other than casual employees." (s 86.) s 87(1): "For each year of service with an employer (other than periods of employment as a casual employee of the employer), an employee is entitled to: (a) 4 weeks of paid annual leave ..."; s 87(2): the entitlement "accrues progressively during a year of service (other than periods of employment as a casual employee of the employer)" (s 87). s 15A(1): a casual only if "(a) the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and (b) the employee would be entitled to a casual loading or a specific rate of pay for casual employees" (s 15A). AustLII consolidated text, retrieved 7 October 2026.
General Retail Industry Award 2020 cl 28.1 (MA000004) and Hospitality Industry (General) Award 2020 cl 30.1 (MA000009): "Annual leave is provided for in the NES. It does not apply to casual employees." Consolidated to 1 July 2026. Fair Work Ombudsman, Annual leave (content last updated 25 September 2026): "All employees (except for casual employees) get paid annual leave." business.gov.au, Employees' pay, leave and entitlements (dated 15 April 2026): "Casual employees do not get annual leave." All retrieved 7 October 2026.
How much of a casual rate is annual leave money
The Retail Award describes its casual loading as payable "instead of entitlements from which casuals are excluded". The Act names those entitlements in s 545A(4): paid annual leave, paid personal/carer's leave, paid compassionate leave, payment for a public holiday not worked, payment in lieu of notice, and redundancy pay. None of the awards or sections we read divides the 25% between them, but the annual leave piece can be measured.
A permanent full-timer is paid for 52 weeks and works 48, so 4 weeks of paid leave adds 4/48 to the pay earned for hours actually worked. At the national minimum wage on 38 hours a week:
| Item | Amount |
|---|---|
| National minimum wage, per hour | $26.44 |
| Casual rate with a 25% loading | $33.05 (of which $6.61 is loading) |
| Permanent: 4 weeks of annual leave (152 hours x $26.44) | $4,018.88 |
| Plus 17.5% leave loading, where the award pays it | $703.30 |
| Permanent annual leave value for the year | $4,722.18 |
| Casual: loading earned over 48 weeks (1,824 hours x $6.61) | $12,056.64 |
| Annual leave as a share of pay for hours worked (4 / 48) | 8.33% |
| The same with 17.5% leave loading (4.7 / 48) | 9.79% |
Treat this as arithmetic, not a legal split. Roughly 8 to 10 of the 25 percentage points line up with the annual leave a permanent worker at that base rate would get. The other 15 to 17 points sit against the remaining five items on the s 545A(4) list. Whether the 17.5% line applies depends on the award: Hospitality cl 30.3 pays it, for example.
Retail Award cl 11.1: "An employer must pay a casual employee for each hour worked a loading of 25% on top of the minimum hourly rate"; NOTE 1: "The casual loading is payable instead of entitlements from which casuals are excluded by the terms of this award and the NES." (MA000004.) Hospitality Award cl 30.3: "a loading of 17.5% on the amount payable to the employee under the NES for a period of paid annual leave" (MA000009). Both consolidated to 1 July 2026, retrieved 7 October 2026.
The same 25% appears in Hospitality Award cl 11.1 ("a loading of 25% in addition to the ordinary hourly rate"), Fast Food Industry Award 2020 cl 11.2 ("a loading of 25% of the minimum hourly rate", MA000003) and Clerks (Private Sector) Award 2020 cl 11.1 (MA000002), each consolidated to 1 July 2026 and retrieved 7 October 2026. For award and agreement free casuals, the minimum wage order cl 5.1: "The casual loading for award/agreement free employees is 25 per cent." cl 5.2: the employer "must pay the employee a casual loading that at least equals the casual loading for award/agreement free employees".
Fair Work Act 2009 s 545A(4), relevant entitlements: "(a) paid annual leave; (b) paid personal/carer's leave; (c) paid compassionate leave; (d) payment for absence on a public holiday; (e) payment in lieu of notice of termination; (f) redundancy pay." (AustLII, retrieved 7 October 2026.) FWC, National Minimum Wage Order 2026, PR799279 cl 4.1: "The national minimum wage is $1004.90 per week, calculated on the basis of a week of 38 ordinary hours, or $26.44 per hour." Applies from the first full pay period starting on or after 1 July 2026; retrieved 7 October 2026.
The casual loading calculator converts a base rate to a casual rate and back again, so you can redo the table with your real pay.
Going permanent: your annual leave starts at zero
There are two ways out of casual work. You and your employer can agree to a change at any time. Or, once you have been employed for 6 months (12 with a small business employer), the employee choice pathway lets you put it to your employer in writing. A written answer is due within 21 days. An acceptance makes you full-time or part-time from the start of the first full pay period after that answer, or from another day the two of you agree. The steps and the grounds for refusal are in casual conversion.
From that day s 86 stops excluding you and annual leave starts to accrue, from nothing. Because s 87 only counts service "other than periods of employment as a casual employee", years as a casual add nothing to the opening balance. The same years are left out of continuous service for NES notice of termination (s 117(4)). Long service leave is where casual years do pay off, because each state and territory long service leave Act reaches casuals whose service is continuous, as do casuals get long service leave explains.
Ava has worked casually at a retailer since Friday 1 March 2024. On Monday 12 October 2026 she gives written notice under s 66AAB. Her employer has until Monday 2 November 2026 to reply, and accepts on Wednesday 4 November. Her pay periods run weekly from Monday, so she becomes permanent on Monday 9 November 2026.
Her annual leave balance that morning is 0 hours, after 2 years and 8 months of casual work. On 38 hours a week she reaches 152 hours (4 weeks) when her first year of permanent service ends in November 2027. Her casual years can still count toward long service leave under her state's law, but not toward annual leave or NES notice. The annual leave calculator shows the same build-up for other rosters.
Fair Work Act 2009 s 66AAB(c): employed "for a period of at least 6 months beginning the day the employment started", or at least 12 months if the employer "is a small business employer at the time the notification is given" (s 66AAB). s 66AAC(1): the employer "must give an employee a written response ... within 21 days after the notification is given to the employer" (s 66AAC). s 66AAD(2): the day "must be the first day of the employee's first full pay period that starts after the day the employer response is given, unless the employer and employee agree to another day" (s 66AAD). s 117(4): continuous service "does not include periods of employment as a casual employee of the employer" (s 117). AustLII consolidated text, retrieved 7 October 2026.
Fair Work Ombudsman, Casual employees (content last updated 7 August 2026): "A casual employee can change to full-time or part-time employment at any time if the employer and employee both agree to it." Retrieved 7 October 2026.
If you were never really casual
The word "casual" on a contract does not decide the question. Section 15A(2)(a) looks at "the real substance, practical reality and true nature of the employment relationship", and its Note adds that a regular pattern of work does not of itself indicate a firm advance commitment. If the substance shows you were not a casual, you can claim the annual leave you should have accrued, including leave accrued but untaken (s 545A(5)).
Section 545A then deals with the loading you were already paid. It applies where a person engaged as a casual received an identifiable loading to make up for missing entitlements but was not, in law, a casual. It works in two steps:
- Subsection (2): the court must reduce the amount payable for the relevant entitlements by the loading paid, but not below nil.
- Subsection (3): "despite subsection (2)", the court may instead reduce the claim by "a proportion (which may be nil) of the loading amount the court considers appropriate". It looks at any instrument or contract term that names the entitlements and the share of the loading for each, and otherwise at what share is appropriate for each entitlement in all the circumstances.
So an offset that wipes the claim out is possible, but it is not certain. A proportion of nil would mean nothing is deducted at all.
A worker is paid as a casual for 2 years at $33.05 an hour ($26.44 base plus $6.61 loading), 38 hours a week in all 52 weeks of both years, and is later found not to have been a casual.
- Annual leave that should have accrued: 2 x 152 = 304 hours x $26.44 = $8,037.76, or $9,444.37 if the award pays a 17.5% leave loading.
- Identifiable loading paid: 2 x 52 x 38 = 3,952 hours x $6.61 = $26,122.72.
- Subsection (2) applied to this annual leave claim alone: the loading is larger than the claim, so the offset would take it to nil.
- Subsection (3): if a court attributed one third of the loading to annual leave (8.33 of the 25 points in the table above), the offset would be $8,707.57 and the $9,444.37 claim would fall to $736.80. At a nil proportion, the full claim stands. The one-third figure is ours, for illustration only.
This shows how the offset is built, not what a court would decide. A real claim usually covers several entitlements at once, and subsection (2) applies to them together. How courts have exercised the subsection (3) discretion is beyond this guide.
Fair Work Act 2009 s 545A(1): applies where the person was paid "an identifiable amount (the loading amount) paid to compensate the person for not having one or more relevant entitlements" but "was not a casual employee". (2): "a court must reduce (but not below nil) any amount payable by the employer to the person for the relevant entitlements (the claim amount) by an amount equal to the loading amount." (3): "Despite subsection (2), the court may reduce the claim amount by an amount equal to a proportion (which may be nil) of the loading amount the court considers appropriate", having regard to instrument or contract terms or "what would be an appropriate proportion of the loading amount attributable to each of those entitlements in all the circumstances." (5): includes entitlements "accrued but untaken". (s 545A.) s 15A(2)(a) and Note to (2)(c)(iv): "A regular pattern of work does not of itself indicate a firm advance commitment to continuing and indefinite work." (s 15A.) AustLII consolidated text, retrieved 7 October 2026.
Taking holidays as a casual
A casual's time off is unpaid. With no annual leave balance to draw on, a holiday is time you do not work, arranged with your employer. Being able to turn shifts down also matters for your status: s 15A(2)(c)(i) lists whether the employer can genuinely choose to offer work, and whether the employee can choose to accept or reject it, among the signs of casual employment.
When you finish up there is no leave to pay out, and a casual does not have to give notice to resign. Some NES leave does reach casuals. Per occasion, they can take 2 days of carer's leave and 2 days of compassionate leave, both unpaid. Each year they get 10 days of family and domestic violence leave, which is paid. Community service leave is available too, unpaid. Sick leave is covered in do casuals get sick leave.
Fair Work Act 2009 s 15A(2)(c)(i): "whether there is an inability of the employer to elect to offer, or not offer, work or an inability of the employee to elect to accept or reject work (and whether this occurs in practice)" (AustLII, retrieved 7 October 2026). Fair Work Ombudsman, Casual employees (content last updated 7 August 2026): casuals get "2 days unpaid carer's leave per occasion", "2 days unpaid compassionate leave per occasion", "10 days paid family and domestic violence leave per year" and "unpaid community service leave"; retrieved 7 October 2026. Resignation: "Casual employees don't have to give notice to their employer when they resign." Retrieved 5 October 2026.
Do casuals get annual leave: questions
Do casual employees get annual leave?
No. Section 86 excludes casuals from the NES annual leave rules and s 87 leaves casual periods out of the service that earns leave, however regular the hours.
What are casual employees not entitled to?
The six items in s 545A(4): paid annual leave, paid personal/carer's leave, paid compassionate leave, payment for a public holiday not worked, payment in lieu of notice and redundancy pay. The full side-by-side comparison is in casual vs permanent.
Who gets paid more, casual or part-time?
Per hour worked, the casual: 25% more on the same base under the awards we checked. Over a year the part-timer gets paid leave and other entitlements instead, so compare whole-year figures, as in the table above.
Is casual loading mandatory?
Yes, where a casual is covered. The Retail (cl 11.1), Hospitality (cl 11.1) and Fast Food (cl 11.2) awards each say the employer must pay a 25% loading, and the 2026 minimum wage order requires at least 25% for award and agreement free casuals (cl 5.1 and 5.2). Rates and penalty stacking are on the casual loading calculator.
How much annual leave do you get for a 40-hour week?
Working 40 ordinary hours a week, a permanent employee accrues 160 hours a year (4 x 40). A casual on the same roster accrues nothing. See annual leave on a 40-hour week.
Do casuals get annual leave after 12 months?
No. Length of service does not change the exclusion. Becoming a full-time or part-time employee does, from the day the change takes effect.
If I become permanent, does my casual time count for annual leave?
No. Your balance starts at 0 hours on the first day you are permanent. Your casual years can still count for long service leave.
Can casual employees take time off?
Yes, unpaid. Whether you can genuinely decline work is one of the factors that makes you a casual in the first place.
Do casual employees get long service leave?
Yes. Every state and territory law can cover a casual whose service is continuous, though each tests continuity its own way: see do casuals get long service leave.
Can a casual be paid out annual leave when they leave?
No. No annual leave accrues, so there is no balance to pay out. Casuals also do not have to give notice when they resign.
Author & reviewer
Sarah has spent over a decade advising Australian SMBs on Fair Work, NES compliance, and payroll. Based in Sydney, she has worked across hospitality, retail and professional services.