Casual Loading & Penalty Rates: What Goes on Your Payslip

What Is Casual Loading?

Casual loading is an additional payment made to casual employees to compensate them for the benefits they do not receive as permanent employees. In most Modern Awards, casual loading is set at 25% on top of the base hourly rate.

This loading compensates casual workers for:

• No paid annual leave
• No paid personal/carer's leave
• No paid compassionate leave
• No redundancy pay
• No notice of termination
• Irregular or unpredictable hours

Example

If the base Award rate for a permanent employee is $25.00/hour, a casual employee performing the same work receives:

• Base rate: $25.00
• Casual loading (25%): $6.25
• Total casual rate: $31.25/hour

This casual rate is the minimum that must appear on the payslip for each ordinary hour worked.

How Casual Loading Appears on Your Payslip

Under Fair Work requirements, casual loading must be separately identifiable on the payslip. This means it should not simply be rolled into a single hourly rate. A compliant payslip should show:

• Base hourly rate: $25.00
• Casual loading (25%): $6.25/hr
• Total casual rate: $31.25/hr
• Hours worked: 30
• Gross casual earnings: $937.50

Some employers show it as a separate line item; others show the loaded rate with a note indicating it includes 25% casual loading. Both approaches are acceptable as long as the loading is identifiable.

What Are Penalty Rates?

Penalty rates are additional payments for work performed during unsociable hours or on specific days. They are designed to compensate employees for working at times when most people are off — weekends, public holidays, early mornings, and late nights.

Penalty rates are set by Modern Awards and enterprise agreements and vary significantly between industries.

Common Penalty Rate Multipliers

Retail Industry Award (General Retail Industry Award 2020):

Hospitality Industry Award (Hospitality Industry General Award 2020):

Note: For casual employees, penalty rates are calculated on the base rate (not the casual-loaded rate) in most Awards. However, the casual loading still applies, so a casual Sunday rate would be: base rate x Sunday penalty + base rate x 25% casual loading.

Important: Always check the specific Modern Award applicable to your industry, as rates can differ significantly.

How Penalty Rates Appear on Payslips

Penalty rates must be itemised separately on payslips. Here is an example for a casual retail worker:

Example Payslip Breakdown

Employee: Sarah Chen (Casual Retail Assistant) Award: General Retail Industry Award 2020 Base rate: $24.10/hr (national minimum wage) Pay period: Fortnight

Each penalty rate component is listed separately so the employee can verify they are being paid correctly.

Overtime vs Penalty Rates

Overtime and penalty rates are different:

• Overtime applies when an employee works beyond their ordinary hours (e.g., beyond 38 hours per week for full-time, or beyond rostered hours)
• Penalty rates apply based on when the work is performed (weekends, public holidays, late nights)
• An employee can receive both overtime and penalty rates simultaneously (e.g., overtime worked on a Sunday)

Overtime Rates (Most Awards)

• First 2 hours of overtime: 150% (time and a half)
• After 2 hours: 200% (double time)
• Sunday overtime: often 200% (double time from the first hour)
• Public holiday overtime: often 250% (double time and a half)

Casual Loading and Super

An important point often misunderstood: casual loading IS included in ordinary time earnings (OTE) for super calculations.

If a casual employee earns:

• Base rate: $25.00/hr
• Casual loading: $6.25/hr
• Total: $31.25/hr
• Hours per fortnight: 30
• Gross OTE: $937.50
• Super (12%): $112.50

However, overtime payments are excluded from OTE, so super is not payable on overtime hours.

Public Holidays in Australia

Each state and territory has its own public holidays, and some cities have additional local holidays. National public holidays include:

• New Year's Day (1 January)
• Australia Day (26 January)
• Good Friday
• Easter Saturday
• Easter Monday
• Anzac Day (25 April)
• Queen's Birthday (date varies by state)
• Christmas Day (25 December)
• Boxing Day (26 December)

State-specific holidays include:

• Melbourne Cup Day (VIC — metro Melbourne only)
• Royal Queensland Show (QLD — Brisbane area)
• Recreation Day (TAS — northern Tasmania)
• Reconciliation Day (ACT)
• Canberra Day (ACT)
• May Day (QLD, NT)

Employees who work on a public holiday are entitled to penalty rates as specified in their applicable Award. Employees who do not work on a public holiday (and it falls on a day they would ordinarily work) are still entitled to be paid for the day.

Casual Conversion Rights

Since 27 March 2021, casual employees have the right to convert to permanent employment under certain conditions:

• Employed for at least 12 months
• Worked a regular pattern of hours for at least 6 months
• Could continue to work those hours as a permanent employee

If a casual employee converts to permanent, they lose the 25% casual loading but gain:

• Paid annual leave (4 weeks per year)
• Paid personal/carer's leave (10 days per year)
• Notice of termination
• Redundancy pay
• Other permanent entitlements

Using PayslipMate for Casual and Penalty Rate Payslips

PayslipMate makes it easy to create payslips that correctly calculate and display:

• Casual loading — automatically calculated at 25% and shown separately
• Penalty rates — Saturday, Sunday, and public holiday rates for common Awards
• Overtime — time-and-a-half and double-time calculations
• Super on OTE — correctly includes casual loading, excludes overtime
• Clear itemisation — every loading and penalty rate shown as a separate line item

Ensure your casual and penalty rate payslips are Fair Work compliant. Create one now for free →