Casual loading is an extra 25% on your base hourly rate under most modern awards, paid instead of annual leave, personal leave and other entitlements permanent staff receive. It is not a reward for flexibility — it is compensation for what you give up.
Two things about it are widely misunderstood, and both cost real money. It is not really 25%. And it does not stack on top of penalty rates the way almost everyone assumes.
Why casuals get a higher hourly rate
A permanent employee's package already contains paid annual leave, personal leave, public holidays and notice of termination, even though those are paid separately. A casual gets none of it — no paid leave, and generally no notice or redundancy. The 25% is meant to roughly offset the difference so the two land in a similar place over a year, at least on paper.
What 25% looks like in dollars
Take a Level 1 retail employee on the 2026-27 base rate of $27.81 an hour:
- Permanent: $27.81 an hour
- Casual: $27.81 × 1.25 = $34.76 an hour
- Difference: $6.95 an hour, or $264.10 on a 38-hour week
Over a 52-week year that is $68,686 gross as a casual against $54,953 as a permanent — about $13,700 more. Every figure here is struck on the published hourly rates, so the numbers reconcile if you check them: $34.76 × 38 × 52, and $27.81 × 38 × 52.
Except it is not really 25%
That comparison has a hole in it. The permanent is paid for weeks they do not work. The casual is not.
Take four weeks of annual leave out and the permanent is paid $54,953 for 48 weeks of actual work, which is $1,144.85 a week worked. The casual earns $1,320.88 a week and has to turn up every one of the 52 to get it. The real premium per week worked is about 15.4%, not 25%.
Add ten days of personal leave and the permanent works 46 weeks, which lifts them to $1,194.62 a week worked and drops the casual premium to about 10.6%.
Per week worked, not per hour
What the casual loading is actually worth
| Hourly | Paid a year | Weeks worked | Per week worked | |
|---|---|---|---|---|
| Permanent | $27.81 | $54,953 | 46.0 | $1,194.63 |
| Casual | $34.76 | $68,686 | 52 | $1,320.88 |
The loading reads as 25%. Per week actually worked it is
10.6%
The permanent is paid for 46.0 weeks of work and 6.0 weeks of leave. Spread their year over the weeks they turn up and the gap is much smaller than the hourly rates suggest.
This still counts nothing for notice, redundancy or predictable hours, which a casual also gives up and which do not have an hourly rate. It also assumes the casual finds work all 52 weeks — the loading is worth more than this when hours are irregular, and less when they are not.
Lowest ongoing classification for the award, ordinary hours only, no penalty or overtime hours. Add your real roster in the Award Pay Calculator.
That is still a real premium, and none of it counts notice, redundancy or the ability to plan a month ahead. But 25% is the difference between two hourly rates, not the difference between two years.
The direction it moves is the useful part. The loading is worth more than the headline if your hours are irregular, seasonal or short-term — you were never going to accrue much leave anyway, and you are paid more for every hour you do work. It is worth less than the headline if you work steady full-time-ish hours for one employer year after year, which is precisely the situation the casual conversion rules exist for.
The loading does not compound with penalty rates
This is the one that shows up in arguments with payroll.
A retail casual working a Sunday is paid 175% of the base rate. People reasonably assume that means the 150% permanent Sunday penalty multiplied by the 25% loading — 150% × 1.25 = 187.5%. It does not. The loading is added to the penalty, not compounded with it.
On the Level 1 rate:
- Permanent Sunday: $27.81 × 1.5 = $41.72
- Casual Sunday: $27.81 × 1.75 = $48.67 — what the award actually pays
- Compounded assumption: $27.81 × 1.875 = $52.14
The gap is $3.47 an hour that people think they are owed and are not. Over a six-hour Sunday shift that is nearly $21, which is enough to look like an underpayment when it is not one.
The same applies to overtime. Retail casual overtime is 175% for the first three hours and 225% after — published that way in the award's own table, expressly "inclusive of casual loading". Not 150% and 200% with the loading applied on top.
Two retail-specific details worth carrying: retail overtime steps at three hours, where most awards step at two. And the casual overtime column is separate from the permanent one, so reading the permanent column for a casual understates the rate by more than 14%.
Some awards do not add the loading at all
The pattern is not uniform, and this is why "check your award" is not filler advice.
Under the Restaurant Industry Award, casual Sunday pay stays at 150% — the same as Saturday, and the same as a permanent. The loading is not added to the Sunday penalty at all.
More surprising: hospitality and restaurant both have a single overtime column for every employment type. Their overtime rates are set against the ordinary hourly rate, which those awards define without the casual loading. So a hospitality casual working overtime is paid the same multiple of base as a permanent — the loading effectively disappears for those hours, where a retail casual keeps it.
That is a genuine structural difference between two awards covering similar work, and it is not something you can reason your way to. It has to be read off each award.
What the loading does carry
Superannuation. The guarantee is calculated on ordinary time earnings, which include the casual loading, so a casual earns super on the loaded rate.
Not much else. Casual loading does not create leave accrual, notice or redundancy entitlements. Long-term regular casuals in many industries have a right to request conversion to permanent employment, which trades the loading for the entitlements it was substituting for.
Work through your own roster, including penalties and overtime, in the Award & Fair Work Pay Calculator, and see the full multiplier tables in the guide to penalty rates.
Frequently Asked Questions
Typically 25% of the ordinary base hourly rate under most modern awards, though it is set award by award.
It is built into the casual penalty rate rather than multiplied by it. A retail casual Sunday is 175% of base — the 150% penalty plus the 25% loading, not 150% × 1.25 = 187.5%. On the Level 1 rate that is $48.67 an hour rather than the $52.14 people often expect.
It depends on the award. Retail publishes a separate casual overtime column at 175% and 225% that already includes the loading. Hospitality and restaurant use one overtime column for everyone, based on a rate that excludes the loading, so a casual gets the same overtime multiple as a permanent.
Yes. Super is calculated on ordinary time earnings, which include the loading.
Per week actually worked it is closer to 15% once four weeks of annual leave are counted, and around 11% with ten days of personal leave as well. Whether that is enough depends on how regular your hours are — the loading is worth more when work is irregular and less when it is effectively full-time.
Many awards and the Fair Work Act give long-term regular casuals a right to request conversion after a qualifying period, trading the loading for paid leave and more security.