Casual loading is an extra 25% on the base hourly rate under many modern awards. It helps compensate casual employees for not receiving paid annual leave or paid personal/carer's leave. It is not a reward for flexibility.
The headline rate is only part of the comparison. A permanent employee is paid while taking annual leave and paid personal/carer's leave. A casual does not receive those entitlements, but can receive paid family and domestic violence leave for rostered hours. The Fair Work Ombudsman says casuals receive 10 days of that leave each year, and long-serving casuals may be eligible for long service leave under state or territory law.
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 x 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 $55,693 as a permanent, including the Retail Award's minimum annual leave loading, or about $13,000 more. The casual figure is $34.76 x 38 x 52. The permanent figure includes ordinary annual pay and the award's minimum leave loading.
Except it is not really 25%
That comparison has a hole in it. The permanent employee is paid for weeks they do not work. The casual employee is not.
Take four weeks of annual leave out and the permanent is paid $55,693 for 48 weeks of actual work, which is $1,160.27 a week worked. In this ordinary-hours illustration, the casual earns $1,320.88 a week only when offered and working those ordinary hours in each of the 52 weeks. The real premium per week worked is about 13.8%, not 25%.
Add ten days of personal leave and the permanent works 46 weeks, which lifts them to $1,210.71 a week worked and drops the casual premium to about 9.1%.
Per week worked, not per hour
What the casual loading is actually worth
| Per week worked | Hourly | Paid a year | Weeks worked | |
|---|---|---|---|---|
| Permanent | $1,210.71 | $27.81 | $55,693 | 46.0 |
| Casual | $1,320.88 | $34.76 | $68,686 | 52 |
The loading reads as 25%. Per week actually worked it is
9.1%
The permanent is paid for 46.0 estimated weeks actually working and 6.0 weeks away from work. This includes $740 in minimum annual leave loading, which can be higher with regular penalty-rate work. Spread their year over the weeks they work and the gap is much smaller than the hourly rates suggest.
This compares only the award pay model above. It does not value notice, redundancy, roster predictability or a casual’s actual availability. It assumes the casual is offered and works the entered ordinary hours for all 52 weeks. Public-holiday days are converted using a 5-day working week, so enter the days the permanent is actually paid not to work.
Lowest ongoing classification for the award, ordinary hours only, no penalty or overtime hours. Annual leave loading is the award minimum: Retail (MA000004 cl 28.3) and Fast Food (MA000003 cl 22.2) can be higher where specified penalty-rate pay applies. Add your real roster in the Award Pay Calculator.
That is still a real premium, and none of it values 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. This example assumes the casual is offered and works the entered ordinary hours for all 52 weeks.
The loading does not compound with penalty rates
A retail casual working a Sunday is paid 175% of the base rate. That is the award's published casual rate, not a 150% permanent Sunday rate multiplied by 25%.
On the Level 1 rate:
- Permanent Sunday: $27.81 x 1.5 = $41.72
- Casual Sunday: $27.81 x 1.75 = $48.67
- Compounded assumption: $27.81 x 1.875 = $52.14
The gap is $3.47 an hour between the published casual Sunday rate and the compounded assumption. Retail casual overtime is also published as 175% for the first three hours and 225% after that, inclusive of casual loading.
Some awards use different Sunday columns
The pattern is not uniform. Under the Restaurant Industry Award, casual Sunday pay is 150% at Levels 1 and 2, and 175% at Levels 3 to 6. The Sunday column must be read with the employee's classification.
Hospitality and Restaurant have one overtime column for each employment type in the award data used here. Check the applicable award and pay guide rather than assuming a casual loading applies to every overtime rate.
What the loading does carry
Superannuation. Casual loading is generally included in ordinary time earnings for superannuation guarantee purposes.
Not much else. Casual loading does not itself create annual leave, paid personal/carer's leave, notice or redundancy entitlements. It does not remove the NES entitlement to paid family and domestic violence leave for rostered hours. Long-serving casuals may be eligible for long service leave under state or territory law.
Work through your own roster, including penalties and overtime, in the Award 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 many modern awards, though the applicable award or agreement controls.
Use the award's casual penalty column. A retail casual Sunday is 175% of base, which includes the casual loading rather than multiplying a 150% rate by 1.25.
It depends on the award. Retail publishes separate casual overtime rates at 175% and 225%. Check the overtime table and the employment-type column in the award or pay guide.
Casual loading is generally included in ordinary time earnings for superannuation guarantee purposes.
In this ordinary-hours example, the premium per week actually worked is about 13.8% with four weeks of annual leave, and 9.1% with ten days of personal leave. It does not value notice, redundancy or roster predictability.
Eligible casual employees may use the NES employee choice pathway to give their employer written notice that they want to change to permanent full-time or part-time employment. It replaced the former casual conversion pathway on 26 August 2024. Under the Fair Work Act 2009 (Cth), ss 66A-66MA, they must have been employed for at least 6 months, or 12 months for a small business, and believe they no longer meet the casual employee definition. The Fair Work Ombudsman explains the pathway and its limits.