Yes. If you would get annual leave loading when you take leave, it must be added to unused annual leave paid out when your job ends, even if your award, agreement or contract says otherwise. Casuals get none.
The rule sits in section 90(2) of the Fair Work Act, which prices a payout at whatever the leave would have paid had you taken it. Three things follow from that one sentence, and this guide takes them in turn: award clauses that try to exclude loading on termination are overridden in the Fair Work Ombudsman's view, weekend workers on some awards can be owed more than 17.5%, and the reason you leave changes the tax but not the entitlement. Rates are the award minimums in force from 1 July 2026.
Key takeaways
- Loading follows the leave. If it is paid on leave you take, it is paid on leave cashed out at the end (Fair Work Act s 90(2)).
- The Fair Work Ombudsman says loading is paid out "even when an award, enterprise agreement or employment contract says that it's not".
- The Hospitality Award pays a flat 17.5% and names termination in its clause. The Clerks and Retail awards pay the greater of 17.5% or the penalties you would have earned.
- Casuals, and anyone whose award, agreement or contract gives no loading on leave, get none on termination.
- No super guarantee is payable on loading paid out. Tax follows the leave: marginal rates after a resignation, 32% withheld after a genuine redundancy.
- Clerks, Retail and Hospitality all require final pay within 7 days of the last day.
Is leave loading paid on termination?
Section 90 of the Fair Work Act has two parts. Subsection (1) sets the pay for leave you take: your base rate for your ordinary hours, a figure that leaves out overtime, penalties, allowances and bonuses. Subsection (2) handles leave you never got to take, and it does not use the base rate at all. It points at what the leave would have paid:
"If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave." AustLII consolidation, retrieved 7 October 2026.
So the test for your final pay is a simple counterfactual. Picture yourself taking the leave in your last weeks instead of leaving. If your award, agreement or contract would have added loading to that leave, the cash payout carries it too. If nothing would have added loading, the payout is base rate only.
The Fair Work Ombudsman puts the rule in plain words and then goes a step further: an instrument cannot switch it off. The reason the job ended is not a condition. Resignation, retirement, redundancy and dismissal all lead to the same entitlement, and the FWO applies it even to a dismissal for misconduct (see below).
Final pay (content last updated 28 September 2026): "Final pay is made up of: ... any annual leave owing, including annual leave loading if it would've been paid during employment." "Annual leave loading is paid out on termination even when an award, enterprise agreement or employment contract says that it's not."
Payment for annual leave (content last updated 10 August 2026): "if an employee would be entitled to annual leave loading or other payments when taking annual leave, these loadings and other payments must be included in the final payment." "Unused annual leave payments apply even if an award, enterprise agreement or employment contract says that they don't." Retrieved 6 to 7 October 2026.
When your award says loading is not paid
Some awards still carry wording that withholds loading at the end of employment, either completely or in particular cases. Where the FWO has written about one of these awards, it reaches the same result every time: the loading is paid, because s 90(2) fixes the payout at what the leave would have paid.
| Award | What the award text says | What the FWO says |
|---|---|---|
| Vehicle Award (MA000089) | Loading is not paid on termination | Paid: 17.5% for day workers; shift workers get the higher of the loading or their shift penalty rate |
| Security Award (MA000016) | Not paid if the employee was dismissed for misconduct | Paid, at 17.5%, with the accumulated leave |
| Airline Operations Ground Staff Award (MA000048), cl 26.5(b) | "Annual leave loading will not be paid on termination." | No award-specific FWO article found; its general statement says loading is paid |
| Contract Call Centres Award (MA000023), cl 22.5(c) | Loading is "not payable on pro rata annual leave on termination" | No award-specific FWO article found; its general statement says loading is paid |
| Timber Industry Award (MA000071), cl 28.6(d) | No loading on proportionate leave paid on termination, unless the employee had at least 3 months' service and was terminated by the employer through no fault of their own | No award-specific FWO article found; its general statement says loading is paid |
| Road Transport (Long Distance) Award (MA000039) | Pays a 30% loading | The 30% is calculated on unused leave paid out when employment ends |
The practical point: a payroll system configured to follow the award text word for word can still underpay you. If your award is one of the first five rows and your payslip shows the leave without loading, the FWO's general statement on the Final pay page is the one to show your employer.
FWO Library K600288, Annual leave loading on termination in the Vehicle Award: "They get the loading even though the Vehicle Award says that it's not paid." FWO Library K600714, Security Award: "They get the loading even though the Security Award says it's not paid if an employee was dismissed for misconduct." FWO Library K600277, Road Transport (Long Distance) Award: "The 30% leave loading is calculated on any unused annual leave paid out when the employment ends." The library articles carry no date. Retrieved 6 to 7 October 2026.
Award texts: Airline Operations Ground Staff Award cl 26.5(b) and Contract Call Centres Award 2020 cl 22.5(c), as retrieved 14 September 2026. Timber Industry Award 2020 cl 28.6(d), consolidated to 1 July 2026, retrieved 7 October 2026.
How much: Clerks, Retail and Hospitality compared
The Clerks, Retail and Hospitality awards each word their loading clause differently, and the wording decides the dollar figure on a payout.
| Clerks (MA000002) | General Retail (MA000004) | Hospitality (MA000009) | |
|---|---|---|---|
| Clause | 32.3 Annual leave loading | 28.3 Additional payment for annual leave | 30.3 Payment for annual leave loading |
| Clause mentions termination? | No: "payable on leave accrued" | No: "payable on leave accrued" | Yes: includes untaken leave "when the employment of the employee ends" |
| Day workers | Greater of 17.5% or weekend penalties (cl 24) | Greater of 17.5% or cl 22 penalties (weekday evenings after 6pm, Saturday, Sunday) | Flat 17.5% |
| Shiftworkers | Greater of 17.5% or shift and weekend penalties (cl 31) | Greater of 17.5% or shiftwork penalties (cl 25) | Flat 17.5% |
| Casuals | No paid annual leave | No paid annual leave (cl 28.1) | No paid annual leave (cl 30.1) |
| Final pay due | Within 7 days (cl 17.5(a)) | Within 7 days (cl 18.4(a)) | Within 7 days (cl 23.6(a)) |
Hospitality is the only one of the three that writes termination into the loading clause itself. Clerks and Retail are silent on it, but silence does not matter: s 90(2) carries whatever the clause would pay on leave taken into the payout.
Weekend workers can be owed more than 17.5%
Under Clerks and Retail the loading is not a fixed percentage. It is the larger of two amounts: 17.5% of the minimum rate for the leave, or the penalty rates you would have earned working your usual roster over the same period. For someone who works Monday to Friday daytime, the penalty side is zero and 17.5% wins. For someone rostered on Saturdays, Sundays or weekday evenings, the penalties can be larger.
On a payout, the question becomes what you would have earned had you taken the leave instead of leaving. The FWO answers it for shift workers in its Vehicle Award article: they get "the higher of the annual leave loading or their shift penalty rate" on termination. Our Retail example below applies the same comparison to a weekend day worker under cl 28.3(c), using the roster she would have worked. That is our calculation from the clause and s 90(2); the FWO has not published a Retail-specific example.
Clerks: Private Sector Award 2020 cl 32.3(c): the additional payment is "the greater of: (i) 17.5% of the minimum hourly rate for the employee's ordinary hours of work in the period; or (ii) The minimum hourly rate for the employee's ordinary hours of work in the period inclusive of weekend penalty rates". General Retail Industry Award 2020 cl 28.3(c): "the greater of: (i) 17.5% of the employee's minimum hourly rate for all ordinary hours of work in the period; or (ii) The employee's minimum hourly rate for all ordinary hours of work in the period inclusive of penalty rates". Hospitality Industry (General) Award 2020 cl 30.3: "An employer must pay an employee a loading of 17.5% on the amount payable to the employee under the NES for a period of paid annual leave, including a period of untaken paid annual leave when the employment of the employee ends." All three consolidated to 1 July 2026, retrieved 6 October 2026.
The annual leave loading calculator applies the flat or higher-of rule for your award to a block of leave, which is the same figure that should land on your payout.
Who gets no loading on termination
- Casuals. Casual employees do not accrue paid annual leave, so there is no leave to pay out and nothing to load. Retail cl 28.1 and Hospitality cl 30.1 both say the annual leave clause "does not apply to casual employees".
- Employees with no loading on leave taken. The FWO notes that loading "doesn't apply to all employees and depends on what their award or enterprise agreement says". Because s 90(2) mirrors leave taken, no loading during employment means no loading at the end.
- Award-free employees with a silent contract. Leave is paid at base rate, which the FWO says does not include extra payments such as penalties and allowances. Loading reaches the payout only if your contract pays it on leave you take.
If you are not sure whether an award covers you, the loading figure on a past leave payslip is a good guide: whatever was added when you took leave is what belongs on the payout. The basics of where loading comes from are in what is annual leave loading.
Pro rata leave and dismissal for misconduct
Section 90(2) speaks of "a period of untaken paid annual leave" and draws no line between a full year's leave and part of a year. The FWO's Payment for annual leave page says unused annual leave payments apply even where an award says they do not. That matters for awards such as Contract Call Centres and Timber, whose texts withhold loading on pro rata or proportionate leave.
Dismissal for misconduct does not cost you the loading either. The Security Award says loading is not paid in that case, and the FWO's article on that award says the employee gets their accumulated leave plus 17.5% loading regardless.
One deduction is allowed the other way. If you took annual leave in advance and left before it accrued, the Clerks Award lets your employer deduct that leave "from any money due to the employee on termination" (cl 32.4(d)), subject to the conditions in that clause.
When the loading must be paid
The loading is part of final pay, so it shares final pay's deadline. Clerks cl 17.5(a), Retail cl 18.4(a) and Hospitality cl 23.6(a) all require payment no later than 7 days after the day employment ends. The FWO says "Most awards require employers to pay employees their final pay within 7 days after their last day of employment." Sick and carer's leave is a different story: it is not paid out when employment ends.
The final pay calculator adds notice, unused leave and loading together so you can check the total before the 7 days are up.
How the loading is taxed when you leave
Loading paid out with unused leave is part of the "unused annual leave payment" for tax: s 83-10(3)(b) of the Income Tax Assessment Act 1997 includes "a bonus or other additional payment for annual leave you have not used". It is not an employment termination payment. The ATO's withholding schedule treats it exactly like the leave it sits on:
| Why employment ended | When the leave accrued | Withholding on the loading |
|---|---|---|
| Normal termination: voluntary resignation, dismissal for inefficiency, retirement | After 17 August 1993 | Marginal rates, included in salary and wages |
| Normal termination | Before 18 August 1993 | 32%, Lump sum A |
| Genuine redundancy, invalidity or early retirement scheme | Any date | 32%, Lump sum A |
The 32% is a withholding rate, not the final tax. Section 83-15 gives a tax offset so that the rate on these payments does not exceed 30%, and the extra 2% is the Medicare levy. If your own marginal rate is lower, your tax return applies the lower rate. Whether your exit qualifies for the 32% row turns on whether it was a genuine redundancy; if you put your hand up, voluntary redundancy explains how that is decided. The full treatment of the leave itself is in tax on an annual leave payout.
ATO, Schedule 7: Tax table for unused leave payments on termination (QC107125, published 17 June 2026, payments from 1 July 2026): "Annual leave loading | Normal termination | Post-17 August 1993 | Marginal rates"; "Annual leave loading | Genuine redundancy, invalidity or early retirement scheme | Any date | 32% | A"; "Normal termination includes voluntary resignation, employment terminated due to inefficiency or retirement." Retrieved 9 September 2026. ITAA 1997 s 83-15: offset "to ensure that the rate of tax on an unused annual leave payment does not exceed 30%". ATO, Employment termination payments for employees (last updated 5 June 2026): "ETPs don't include: lump sum payments for unused annual or long service leave".
Is super paid on loading in your final pay?
No. Unused leave paid out on termination, loading included, is not qualifying earnings, so no super guarantee is owed on it. The ATO says this holds whatever the reason for leaving and however the payment is taxed. A forum answer that still circulates claims the loading attracts super on termination; the ATO's table names annual leave loading in the "No" row.
| When the loading is paid | Super guarantee? |
|---|---|
| With leave you take during employment | Generally yes, unless the loading is clearly linked to a lost opportunity to work overtime |
| Cashed out with leave while still employed | Yes |
| Paid out with unused leave on termination | No, for any reason for leaving |
The same split for leave in general is in superannuation on annual leave. If the payout came with a redundancy, is super payable on redundancy covers the other parts of the package.
What payments are qualifying earnings (QC105843, last updated 2 September 2026), Table 13: "Unused leave on termination, including annual leave, annual leave loading and long service leave. This applies regardless of the reason for termination or treatment for tax purposes." OTE: No; QE: No. Table 2: "Annual leave loading - all other." Yes. Table 6: "Cashed out annual leave and leave loading in service." Yes. When a worker leaves your business (QC67964, last updated 9 June 2026): "Employment termination payments and unused leave payments don't form part of an employee's ordinary time earnings or qualifying earnings." Retrieved 6 October 2026.
Worked examples
Three payouts at the 2026-27 award minimum rates. Each assumes the leave would have been taken at the employee's usual hours.
| Employee | Unused leave | Base payout | Loading | Total |
|---|---|---|---|---|
| Hospitality Level 2 (food and beverage attendant grade 2), any roster | 76 hours x $27.08 | $2,058.08 | Flat 17.5%: $360.16 | $2,418.24 |
| Clerks Level 2 Year 1, Monday to Friday only | 100 hours x $29.45 | $2,945.00 | 17.5% (no weekend penalties to compare): $515.38 | $3,460.38 |
| Retail Level 1, weekend roster | 76 hours x $27.81 | $2,113.56 | Penalties forgone: $406.03 | $2,519.59 |
Priya is a Retail Employee Level 1 on $27.81 an hour. Her usual 38-hour week is 8 hours on Saturday (125%), 7.6 hours on Sunday (150%), 6 hours on weekday evenings after 6pm (125%) and 16.4 ordinary weekday hours. She resigns with 76 hours (two weeks) of leave unused.
Per week, a flat 17.5% would be 0.175 x 38 x $27.81 = $184.94. The penalties she would have earned are (8 x 0.25 + 7.6 x 0.50 + 6 x 0.25) x $27.81 = $203.01. Over the two weeks that is $369.87 against $406.03, so the higher-of test gives $406.03.
Her payout is $2,113.56 + $406.03 = $2,519.59. A payroll that applied a flat 17.5% would pay $2,483.43, which is $36.16 short.
Tax: because she resigned and all her leave accrued after 1993, the $2,519.59 goes into salary and wages at marginal rates. Had her job been made genuinely redundant instead, 32% would be withheld: about $806, rounded to the dollar, reported at Lump sum A. Super on the payout is $0 either way.
Rates are the award minimum hourly rates from 1 July 2026: Hospitality Table 3 Level 2 $1,029.10 a week ($27.08 an hour), Clerks Table 4 Level 2 Year 1 $1,119.10 ($29.45), Retail Table 4 Level 1 $1,056.80 ($27.81). Retail penalties are from Table 12 (weekday after 6pm 125%, Saturday 125%, Sunday 150%). Applying the higher-of test to a payout uses the roster Priya would have worked during the leave. The FWO confirms that approach for Vehicle Award shift workers; for a Retail day worker it is our reading of cl 28.3(c) with s 90(2).
The annual leave payout calculator turns your unused hours and rate into a payout with loading. For the loading on its own, use the annual leave loading calculator.
If your final pay left the loading out
- Check the payslip. The leave paid out and the loading are often shown as separate lines. If you see the leave hours but no loading, or a loading figure that looks like a flat 17.5% when you work weekends under Clerks or Retail, it is worth a second look.
- Work out the expected figure. Use your hourly rate, your unused hours and your award's loading rule, or run the numbers through the payout calculator above.
- Raise it in writing. Quote s 90(2) and the FWO Final pay statement that loading is paid out even where an award, agreement or contract says it is not. If your award is the Vehicle or Security Award, the FWO library article for that award says so directly.
- Escalate if it is not fixed. The Fair Work Ombudsman handles final pay disputes, and its Final pay page is the starting point.
If the job ended in a redundancy, check the redundancy pay as well with the redundancy calculator. If you think the process before the decision was not followed, see redundancy consultation.
Leave loading on termination: questions
Is leave loading paid on termination?
Yes, if you would have received loading on leave taken during your employment. Section 90(2) of the Fair Work Act values the payout at what the leave would have paid, and the FWO says this applies even where an award, agreement or contract says otherwise.
Is annual leave loading paid out if I resign?
Yes. Resigning does not change the entitlement. It changes the tax: after a resignation the leave and loading are taxed at your marginal rates with your wages, assuming the leave accrued after 17 August 1993.
My award says loading is not paid on termination. Do I still get it?
According to the Fair Work Ombudsman, yes. Its articles on the Vehicle and Security awards say the employee gets the loading even though the award text says it is not paid, and its Final pay page states the rule for any award, agreement or contract.
Is loading paid on pro rata annual leave?
On the FWO's general statement, yes. Section 90(2) covers any untaken paid annual leave, and the FWO says unused leave payments apply even if an award says they do not, which reaches awards such as Contract Call Centres that exclude pro rata leave.
I was dismissed for misconduct. Do I lose my leave loading?
No. The FWO's Security Award article deals with exactly this case and says the accumulated leave and 17.5% loading are still paid.
Do casuals get leave loading when they leave?
No. Casuals do not accrue paid annual leave, so there is nothing to pay out and no loading to add.
Is super paid on leave loading in my final pay?
No. The ATO lists annual leave loading paid out on termination as not ordinary time earnings and not qualifying earnings, whatever the reason you left.
How is leave loading taxed when I leave?
The same way as the leave it is attached to: marginal rates after a normal termination with post-1993 leave, and 32% withheld at Lump sum A after a genuine redundancy, invalidity or early retirement scheme.
How much is leave loading on a payout?
Usually 17.5% of the base pay for the unused hours. Under the Clerks and Retail awards it can be more for weekend and evening workers, because those awards pay the greater of 17.5% or the penalties forgone. The Road Transport (Long Distance) Award pays 30%.
When should my final pay arrive?
Within 7 days of your last day under the Clerks, Retail and Hospitality awards, and the FWO says most awards set the same deadline.
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.