Leave Loading Calculator: The 17.5% Rule.
Calculate the 17.5% annual leave loading on your leave, check the higher-of test against weekend and shift penalties, and see how the ATO taxes it.
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| Component | Formula | Value |
|---|---|---|
| Hourly rate | - | $35.00 |
| Weekly base | 35.00 × 38h | $1330.00 |
| 4 weeks base | 1330.00 × 4 | $5320.00 |
| 17.5% loading | 5320.00 × 0.175 | $931.00 |
Disclaimer: This tool does not constitute legal or financial advice. Results may be inaccurate due to changes in legislation or your circumstances. This tool does not constitute legal or financial advice. We do not recommend taking actions based solely on these results. The calculator makes assumptions and results may be inaccurate due to changes in legislation, modern awards, or your personal circumstances. You use this information at your own risk. We can't guarantee to be perfect, so do note you use the information at your own risk and we can't accept liability if things go wrong. For official guidance, visit Fair Work Ombudsman (fairwork.gov.au). Fair Work Ombudsman.
Three numbers that define this entitlement.
Every figure derived from current legislation.
Which awards pay annual leave loading?
Annual leave loading of 17.5% is set by your modern award or enterprise agreement, not by the NES, so it is not universal. Most awards pay the flat 17.5%, but shift workers under awards such as the Nurses Award, Aged Care Award, Manufacturing Award, Electrical Award and Mining Award receive the greater of 17.5% or the shift penalties they would have earned had they worked. Loading is calculated on your base rate, so it rose with the 2026 minimum wage increase. Superannuation is payable on loading unless the employer holds written evidence that it is referable to a lost opportunity to work overtime, which is set out in superannuation on annual leave. To put a figure on your own loading, including what is left after tax, use the calculator at the top of this page.
Is leave loading paid out when you leave a job?
Yes, where you would have been paid loading had the leave been taken: under section 90(2) of the Fair Work Act 2009 unused annual leave is paid out at the amount that would have applied, and the Fair Work Ombudsman says the loading is paid even where an award, agreement or contract says it is not. Which awards pay more than 17.5%, and how it is taxed, are set out in leave loading on termination.
How to calculate leave loading
Annual leave loading is an extra percentage paid on top of your ordinary pay when you take annual leave. The standard rate in most modern awards is 17.5%. Start with the ordinary pay for the period of leave, then add 17.5%.
The formula. Ordinary hours x base hourly rate = leave pay. Leave pay x 0.175 = loading. Leave pay x 1.175 = total paid for that leave.
| Step | Working | Amount |
|---|---|---|
| Base hourly rate | Given | $32.00 |
| Ordinary hours in the leave | 2 weeks x 38 | 76 hours |
| Ordinary pay for the leave | 76 x $32.00 | $2,432.00 |
| Leave loading | $2,432.00 x 17.5% | $425.60 |
| Total | $2,432.00 + $425.60 | $2,857.60 |
Loading is calculated on ordinary hours at your base rate. Overtime and most allowances sit outside that, so they do not inflate the loading, which is why the loading on a high-overtime job looks smaller than expected. The calculator at the top of this page runs this for you and applies your award's rule.
17.5% loading on 4 weeks by salary
| Annual salary | Ordinary hourly rate | 4 weeks (152 hrs) | 17.5% loading |
|---|---|---|---|
| $60,000 | $30.35 | $4,613 | $807 |
| $70,000 | $35.41 | $5,382 | $942 |
| $80,000 | $40.47 | $6,151 | $1,077 |
| $90,000 | $45.53 | $6,921 | $1,211 |
| $100,000 | $50.59 | $7,690 | $1,346 |
| $120,000 | $60.71 | $9,228 | $1,615 |
Ordinary hourly rate derived as salary / 52 / 38. Gross figures, before tax. Your award may set a different ordinary-hours week.
The higher-of test
Multiplying your ordinary pay by 17.5% is right for roughly two thirds of awards and wrong for the rest. Many awards do not simply pay 17.5%. They pay whichever is greater: the 17.5% loading, or the amount you would have received including the penalty rates attached to the hours you would have worked. The wording is typically "whichever is the greater but not both", which makes clear you receive one or the other.
The point is to protect people whose regular income depends on penalties. A shift worker or weekend worker earns penalty rates as a routine part of their income, so if annual leave were paid at base rate only, taking leave would mean a pay cut. If your usual fortnight includes weekend ordinary hours worth 25% more than 17.5% of your base, the flat loading would leave you worse off for taking leave, and the higher-of test stops that.
Day workers are covered too
The higher-of test is commonly described as a shift worker protection. In 11 of the 33 awards on this site, the award text applies it to day workers by name, which means someone who never works a shift roster but regularly works weekends can be owed more than 17.5%.
"For an employee who would have worked on day work only had they not been on leave, the additional payment is the greater of: (i) 17.5% of the minimum hourly rate...; or (ii) the minimum hourly rate ... inclusive of weekend penalty rates..."
The 11 awards where a day worker gets a higher-of test are Clerks, General Retail, Manufacturing, Banking and Finance, Fast Food, Hair and Beauty, Transport, Waste Management, Cleaning Services, Pharmacy and Storage Services. General Retail states it at clause 28.3(c), Manufacturing at 34.4(b)(i), Banking and Finance at 22.3(b)(i), Pharmacy at 23.3(b)(i), Transport at 24.4(b)(i) and Waste Management at 22.2(a).
Contrast that with Nurses, where clause 22.5(a) gives an employee other than a shiftworker a flat 17.5%, and only clause 22.5(b) applies the higher-of test to shiftworkers. Aged Care and SCHADS use the same shape. So the rule genuinely does differ by award, and the common shorthand is unreliable.
If you are a day worker on one of those 11 awards and you regularly work weekend ordinary hours, work out both figures and take the larger. Your award's rule is stated on its page in the award index.
Two awards compare whole-of-pay
Security (MA000016) and Mining (MA000011) do something different again. Rather than comparing a loading against penalties, they compare total pay.
The employer must pay the greater of: "(i) the amount the employee would have earned during that period for those ordinary hours had they not been on leave; and (ii) the employee's minimum hourly rate ... plus a loading of 17.5%."
The practical difference is that the comparison is run on the whole amount, not on the loading component, and it is not split by worker type. Everyone under those awards gets the same test.
A worked example
A retail day worker on $30.00 an hour takes two weeks of leave. Their ordinary roster includes eight Saturday hours a fortnight at 125% and four Sunday hours at 150%.
| Option | Working | Amount |
|---|---|---|
| Ordinary pay for 76 hours | 76 x $30.00 | $2,280.00 |
| Option A: flat 17.5% | $2,280.00 x 17.5% | $399.00 |
| Option B: weekend penalties | (8 x $7.50) + (4 x $15.00) | $120.00 |
| Paid | The greater of A and B | $399.00 |
Here the flat loading wins, which is the usual outcome for a modest weekend roster. The test starts to matter when weekend and evening hours make up a large share of the roster, so it is worth running rather than assuming. Under the shift worker shorthand this employee would not even have been told the test existed, because they are a day worker.
Why leave loading is not in the NES
The National Employment Standards give every permanent employee four weeks of paid annual leave, but say nothing at all about loading. Section 90(1) of the Fair Work Act sets what you are paid for annual leave:
An employee taking a period of paid annual leave must be paid at the employee's base rate of pay for the employee's ordinary hours of work in the period.
Base rate of pay is a defined term, and it excludes loadings, monetary allowances, overtime, penalty rates, incentive payments and bonuses. So the statutory floor for annual leave is your plain hourly rate. Leave loading comes from your modern award or enterprise agreement, which means three different outcomes are all normal:
- Your award provides a flat 17.5%.
- Your award provides the greater of 17.5% or the shift penalties you would have earned. Common in shift-work awards, and you get one or the other, not both.
- Your award provides no loading at all.
Who actually gets it
- Covered by a modern award? Almost certainly yes. All 33 awards on this site provide 17.5% loading. Find yours on the award index.
- Covered by an enterprise agreement? Check the agreement. Most carry loading, some roll it into a higher base rate instead, which is lawful provided the agreement passes the better off overall test.
- Award-free, on a common law contract? Only if your contract says so. Many salaried professional roles do not provide it, and instead pay a salary set above award level. That is a lawful outcome rather than an underpayment.
A common arrangement in salaried roles is an annualised salary that expressly absorbs loading and penalties. That is permitted, but the salary must leave you no worse off than the award would have.
Casual loading is a different thing
Casual employees do not accrue paid annual leave, so there is no leave to load. They receive a casual loading instead, usually 25%, paid on every hour worked as compensation for the absence of paid leave, notice and redundancy pay. Switch the calculator to the Casual 25% tab to see the implied base rate inside a loaded casual rate. See casual vs permanent for the full comparison, or the casual loading calculator for penalty rates with the 25% added rather than compounded.
How leave loading is taxed
As ordinary income at your marginal rate. There is no concessional treatment while you are employed, and the old tax-free threshold for leave loading no longer exists.
On termination, loading is taxed on the same basis as the leave it attaches to, so it follows the annual leave rows of ATO Schedule 7 rather than having its own rules: at marginal rates after a resignation or retirement, and withheld at 32% after a genuine redundancy. See the annual leave payout calculator for that treatment.
Common mistakes
- Assuming the NES guarantees loading. It does not. Your award does, or it does not.
- Adding loading to shift penalties. Most shift awards pay the greater of the two, not the sum.
- Calculating loading on your total package. It applies to ordinary hours at base rate.
- Expecting casual loading and leave loading together. The 25% casual loading exists precisely because there is no paid leave.
Entitlements that go with leave loading.
These come up in the same pay run or calculation. Each has its own calculator.
Leave loading questions.
The most-asked questions about this entitlement.
What is annual leave loading?
Who is entitled to leave loading?
How is leave loading calculated for shift workers?
Is leave loading paid out on termination?
Can leave loading be cashed out?
Why is leave loading 17.5%?
How do you calculate 17.5% annual leave loading?
Do I get leave loading and shift penalties at the same time?
What if my award has no shiftwork provisions?
Do casuals get annual leave loading?
How is annual leave loading taxed?
Does leave loading count towards superannuation?
Is leave loading paid on long service leave?
Built on Modern awards.
Every leave loading calculation on this page is built directly from Modern awards and the relevant modern award where applicable.
Reviewed by a registered HR practitioner.