Casual Loading: 25% on Top ($31.19/hr)

The 25% casual loading is a pay premium added to the base hourly rate to compensate casual employees for the entitlements they don't receive. Specifically, the loading offsets: no paid annual leave (4 weeks for full-time), no paid personal/carer's leave (10 days per year), no paid compassionate leave (2 days per occasion), no notice of termination or redundancy pay, and the general lack of certainty about ongoing work. The idea is that the higher hourly rate makes up for these missing benefits.

Whether 25% truly compensates for all of these is debatable — modelling suggests permanent entitlements can be worth 30-35% of base salary over the long term, particularly when leave loading and redundancy are factored in.

Casual loading is calculated on top of the minimum base rate for the relevant classification under your award. For example, if the base rate for a Level 1 Retail Employee is $25.44/hr, the casual rate is $25.44 + 25% = $31.80/hr. The loading applies to the ordinary base rate before any penalty rates are added.

When penalty rates apply (e.g., Sunday work), the penalty is generally calculated on the base rate first, and then the casual loading is applied — or the award may specify a single casual penalty rate. Always check your specific award, as the calculation method can vary between awards and can significantly affect your pay.

While 25% is the standard casual loading under most Modern Awards, some awards and enterprise agreements have different casual loading rates. For example, certain awards in the building and construction industry may provide for a different casual loading structure that includes specific allowances. Some enterprise agreements negotiate a higher casual loading in exchange for other trade-offs.

Plus, some awards calculate the casual rate differently — instead of a simple percentage on top of the base rate, they specify separate casual rates for each classification level that may not be exactly 25% above the permanent rate. Always verify the exact casual rate in your specific award.

For employers, the choice between casual and permanent staff involves weighing the higher hourly cost of casuals against the hidden costs of permanent employees. A permanent employee on $30/hr actually costs roughly $39-42/hr when you include 12% super, 4 weeks annual leave (7.7% of salary), 17.5% leave loading, 10 days personal leave (3.8% of salary), and workers compensation insurance. A casual on the same base rate costs $37.50/hr (with loading) plus 12% super, but with no leave liabilities and easier rostering flexibility.

For short-term or irregular work, casuals are often cheaper; for consistent, ongoing roles, permanent employees usually cost less overall.

Since the Closing Loopholes Act amendments took effect in August 2024, the casual conversion framework gives employees more power. A casual employee can notify their employer that they believe their employment no longer meets the definition of casual (i.e., they've a regular pattern of work with a firm advance commitment). The employer then has 21 days to respond.

For small businesses (under 15 employees), the employee pathway applies after 12 months of employment. For larger businesses, it applies after 6 months.

An employer can only refuse conversion on fair and reasonable operational grounds, and must provide a written response explaining their reasons.

Employers must provide every new casual employee with the Casual Employment Information Statement (CEIS) before or as soon as practicable after the employee starts work. This document, published by the Fair Work Ombudsman, explains what it means to be a casual employee, the casual conversion process, and the employee's rights. For existing casual employees, the CEIS must be provided at least once every 12 months.

Failure to provide the CEIS is a technical breach of the Fair Work Act. The statement was updated in 2024 to reflect the new casual definition and conversion framework introduced by the Closing Loopholes Act.

Financial modelling shows that over a working lifetime, the 25% casual loading may not fully compensate for lost entitlements. A permanent employee who takes 4 weeks annual leave with 17.5% leave loading, uses 5 of their 10 personal leave days, and receives redundancy pay after several years of service is getting benefits worth more than 25% of their base rate. On top of that, casual employees miss out on income certainty, career development opportunities, and — importantly — long service leave after a qualifying period.

If you've been working regular, predictable hours as a casual for more than 6 months, it's worth considering whether conversion to permanent employment would leave you better off.

Seeing the actual dollar amounts helps illustrate what 25% means in practice across different industries and award levels. Under the General Retail Industry Award, a Level 1 retail employee earns $25.44 per hour as a permanent worker. With 25% casual loading, this becomes $31.80 per hour — an extra $6.36 per hour.

Working 25 hours per week (a typical casual load), that's an additional $159 per week or roughly $8,268 per year compared to the base rate. Under the Restaurant Industry Award, a Food and Beverage Attendant Grade 2 earns $25.51 per hour permanently, rising to $31.89 with the casual loading.

Under the Clerks-Private Sector Award, a Level 1 administrative employee earns $25.78 base, or $32.23 as a casual. Under the Building and Construction General On-site Award, a labourer (CW1) earns $27.21 base, jumping to $34.01 as a casual.

For a casual worker on the national minimum wage of $24.95 per hour, the loading adds $6.38 to reach $31.19.

Working full-time equivalent hours (38 per week, 48 weeks per year), a casual on minimum wage earns approximately $58,141 gross per year compared to $46,512 for a permanent employee on the same base — a difference of $11,629.

However, the permanent employee also receives 4 weeks paid leave ($3,876 value), 10 days paid sick leave ($1,938 value), and notice/redundancy protections, which together are worth an estimated $6,500 to $8,000 annually. The gap narrows considerably when you factor in these entitlements.

About the interaction between casual loading and penalty rates is one of the most confusing areas of pay calculations, and it varies between awards. Under most modern awards, penalty rates for casuals are calculated differently from permanent employees. There are two common methods.

Method 1 (most common): The award specifies a composite casual penalty rate that already includes the casual loading. For example, under the General Retail Industry Award, a permanent employee gets 125% for Saturday work, while a casual gets 150% — this 150% includes both the Saturday penalty and the casual loading.

Method 2: The casual loading is applied on top of the penalty rate. So if the base rate is $25.00 and the Sunday penalty is 200%, a casual would earn $25.00 x 2.00 x 1.25 = $62.50. This method is less common but appears in some awards and enterprise agreements. The difference between these methods can be significant.

Using Method 1 for Sunday work at 200% base: $25.00 x 2.00 = $50.00 (casual loading already built in). Using Method 2 for the same shift: $25.00 x 2.00 x 1.25 = $62.50.

That's a $12.50 per hour difference. You must check your specific award's penalty rate schedule for casual employees — do not assume the loading simply stacks on top of every penalty. The Fair Work Ombudsman's Pay Calculator at calculate.fairwork.gov.au will show you the exact casual penalty rate for each day and time under your award.

An important detail that many casual workers overlook is that superannuation is calculated on your total earnings including the casual loading. The 25% loading is considered part of your ordinary time earnings (OTE) for SG purposes. So if you earn $31.19 per hour as a casual on minimum wage, your employer must pay 12% super on the full $31.19 — not on the base rate of $24.95.

For a casual working 25 hours per week at the minimum casual rate, this means $31.19 x 25 = $797.00 per week in OTE, and $797.00 x 0.12 = $95.64 per week in super contributions. Over a year (assuming 48 working weeks), that is approximately $4,591 in super.

By contrast, a permanent employee on the same 25 hours at the base rate of $24.95 would receive $24.95 x 25 x 0.12 = $76.50 per week in super, or $3,672 per year. The casual employee actually receives more super in absolute terms because the loading inflates the OTE figure.

However, the employer's total cost is also higher — this is one reason some employers prefer permanent staff for ongoing roles.

Check your payslip to confirm super is being calculated on your total pay rate including the loading, not just the base rate.

If your employer is only paying 12% on the pre-loading rate, they are underpaying your super and you should raise it immediately.

A few situations where the 25% casual loading isn't paid, or is paid differently, that catch workers off guard.

There are several situations where the 25% casual loading isn't paid, or is paid differently, that catch workers off guard.

• during workers compensation periods — if you are injured at work and receiving workers compensation payments, the loading is generally not included in the compensation calculation (though this varies by state)
• under some enterprise agreements, the casual loading may be set at a different rate or absorbed into a flat hourly rate
• if you're a casual employee who has been engaged for a specific task or project under certain awards, different loading rules may apply
• trainees and apprentices on casual engagements may have different loading arrangements under their training agreement or applicable award
• the casual loading doesn't apply to independent contractors — if you are genuinely self-employed, you set your own rates and don't receive the loading. However, if you're a contractor in name only (sham contracting) and are really working as an employee, you may be entitled to back-claim the loading and other entitlements.

  The critical test is always whether you are legally an employee regardless of what your contract says

If your employer calls you casual but doesn't pay the loading, they may be in breach of the relevant award — or they may have misclassified you as a contractor.

Either way, you should seek advice from the Fair Work Ombudsman.