Casual loading

What does casual loading compensate for?

Casual employees trade security for flexibility and a higher hourly rate. The loading stands in for the entitlements permanent staff receive: paid annual leave, paid personal and carer's leave, notice of termination, redundancy pay and payment for public holidays not worked. It is compensation for the absence of those entitlements, not a bonus on top of them.

How is casual loading calculated?

Apply the loading percentage to the base hourly rate for the classification. On a $30 base rate, a 25% loading takes the casual rate to $37.50 an hour. The applicable award or enterprise agreement sets both the base rate and the loading, and how the loading interacts with overtime and penalty rates differs between awards, so the instrument itself is the authority, not the general rule.

Can a casual convert to permanent employment?

Yes. Under the employee choice pathway in the Fair Work Act, an eligible casual who has been employed for at least six months (twelve in a small business) can notify their employer in writing that they wish to convert to permanent employment. Employers can only decline on limited grounds, and conversion removes the loading in exchange for the full set of permanent entitlements.