Payment for annual leave & annual leave loading

Annual leave loading is an additional payment employees receive when taking paid annual leave.

The Retail Award provides for an annual leave loading of 17.5% in addition to the base rate of pay. During a period of annual leave, your retail employees receive the higher of:

  • their ordinary wages, excluding all penalty rates, plus 17.5%, or
  • ordinary wages including weekend penalties (and shift loadings for shiftworkers).

Example

Alexander has been working for The Home Store as a part-time forklift operator. He works 7.5 hours per week, on a permanent weekend roster, working on Saturdays only.

Alexander has applied in writing to his employer to take one week of annual leave for a camping trip. The employer approves his annual leave request. While Alexander is on annual leave, he receives his ordinary rate of pay and his additional Saturday penalty (which is higher than 17.5%) according to the Retail Award.

Even though the Retail Award says that annual leave loading is 17.5%, Alexander will receive a his Saturday penalty in accordance with the annual leave loading clause because employees receive either the 17.5% loading or their penalty rates such as Saturday penalty rates, whichever is the greater.

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Page last updated: 02 Sep 2010