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Payment for annual leave and annual leave loading

When your security employees take annual leave, you must pay them the higher of:

  • the ordinary wages they would have earned if they worked (including penalty rates and allowances), excluding overtime, or
  • their ordinary rate of pay (exclusive of penalties and allowances), and applicable leading hand allowances, relieving officer’s allowances and first aid allowances, plus a loading of 17.5%

You must make this payment to the employee before they start their annual leave.

Annual leave loading is payable on termination of employment unless an employee is dismissed for serious misconduct. Where your employee is owed accrued annual leave upon termination of their employment, you must pay them the amount they would have earned for working their normal hours (including any penalties and allowances) exclusive of any overtime, plus 17.5% leave loading.

Example

Vanessa has been working as a full-time security guard for Protex Pty Ltd and her spread of hours includes both work performed on weekends and overtime.

Vanessa decides to terminate her employment with Protex Pty Ltd after 2 years of employment and provides two weeks of notice to her employer. At the time she finishes work she has 5 weeks of annual leave outstanding.

Protex Pty Ltd is required to pay out the 5 weeks of annual leave at Vanessa’s ordinary weekly wage, which includes penalty rates for weekend work but will not include the overtime penalties. Vanessa will also be entitled to 17.5% leave loading.

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Page last updated: 19 November 2010