Pay annual leave loading where the award or contract provides
Most modern awards require 17.5% loading on annual leave taken or paid out on termination.
Who must comply
Employers whose modern award or agreement provides for annual leave loading.
What triggers it
Employee takes annual leave or termination triggers payout.
When due
On payment of leave / termination.
Evidence required
Award analysis; payslip + payment evidence including loading.
Max penalty
Civil penalty for underpayment + serious-contravention 10× multiplier potential
Summary
Section 90 Fair Work Act requires payment for accrued + untaken annual leave on termination. Most modern awards (and some enterprise agreements) require an additional 17.5% loading on annual leave taken or paid on termination. Loading must match the award basis (typically OTE).
Enforced by
Source legislation
Topics
Related obligations
- CWLTHProvide 10 days paid family + domestic violence leave (FDV)Paid FDV leave for all employees: 10 days per year (full-time + part-time + casual).
- CWLTHAvoid sham contracting (s 357 Fair Work Act)Employer must not misrepresent employment as contractor relationship.
- CWLTHEmployee-like worker minimum standards (Closing Loopholes No. 2 2024)FWC can set minimum standards for 'employee-like' workers (gig economy).
- CWLTHSame job same pay (labour hire reform)Labour hire workers entitled to same minimum pay as direct employees on host site.
- CWLTHCasual employment definition + conversion (Closing Loopholes 2024)New casual employment definition + employee choice pathway from 26 August 2024.
- CWLTHLodge WGEA workplace gender equality reportPrivate-sector employers with 100+ staff must report annually; pay gaps are now publicly published.
Frequently asked questions
- Who must comply with annual leave loading where the award or contract provides?
- Employers whose modern award or agreement provides for annual leave loading.
- What triggers annual leave loading where the award or contract provides?
- Employee takes annual leave or termination triggers payout.
- When is annual leave loading where the award or contract provides due?
- On payment of leave / termination.
- What is the maximum penalty for annual leave loading where the award or contract provides?
- Civil penalty for underpayment + serious-contravention 10× multiplier potential
- What evidence is required for annual leave loading where the award or contract provides?
- Award analysis; payslip + payment evidence including loading.
Source: https://fairwork.gov.au/leave/annual-leave. Rules Mate is not a law firm. Always verify against the live regulator source before acting.