Many Australian employers believe that casual employees don’t get leave. This is incorrect. Casual employees are entitled to annual leave, personal leave, and must be paid public holidays. However, the way these entitlements are calculated and paid differs significantly from permanent employees.
Understanding casual leave entitlements is critical because underpaying casuals is one of the most common compliance failures in Australia. This guide explains what casuals are entitled to and how to calculate and pay their leave correctly.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult an employment lawyer for guidance specific to your organization.
What Is a Casual Employee?
A casual employee is someone who is engaged on an irregular or part-time basis, without a firm commitment to ongoing work. Key characteristics:
- No guaranteed hours
- Flexible scheduling
- Can be terminated with no notice (in some cases)
- Paid a “casual loading” to compensate for lack of job security
- Still entitled to minimum NES leave entitlements
Important: The Fair Work Act provides a test to determine whether someone is truly casual or should be classified as permanent. Courts have found that many workers labeled “casual” are actually entitled to permanent status with all the associated benefits.
Annual Leave for Casuals
Entitlement
Casual employees are entitled to 4 weeks of annual leave per year under the National Employment Standards — the same as permanent employees.
However, the way this leave is calculated and paid differs:
For Permanent Employees:
- Leave accrues: 4 weeks ÷ 52 weeks = 0.077 weeks per week worked
- Paid at ordinary rate of pay
- Carried over and managed
For Casual Employees:
- Leave is typically paid out weekly as a percentage of hours worked
- Calculated as: 4 weeks ÷ 52 weeks = 7.69% of ordinary hours
- Often paid as a loading added to each paycheck (rather than as separate leave)
How to Calculate Casual Annual Leave
Method 1: Weekly Payment of Leave
If a casual employee works 20 hours per week at $30/hour:
- Annual leave entitlement: 4 weeks × 20 hours = 80 hours
- Paid weekly: 80 hours ÷ 52 weeks = 1.54 hours per week at $30/hour = $46.15/week
This $46.15 is typically paid as a separate line item on the payslip labeled “annual leave” or added to the hourly rate.
Method 2: Casual Loading
Some employers include annual leave in the casual loading:
- Casual loading: 25% (includes annual leave 7.69% + job insecurity compensation ~17%)
- If the ordinary rate is $30/hour, the casual is paid: $30 × 1.25 = $37.50/hour
- This includes payment for annual leave
Method 3: Accumulation and Taking Leave
Some awards and agreements allow casuals to accumulate annual leave and take it like permanent employees. For example:
- Casual accumulates 4 weeks per year
- Can take the leave (with mutual agreement)
- Takes a week off without losing the casual loading for that week
Personal Leave (Sick Leave) for Casuals
Entitlement
Casual employees are entitled to 10 days of paid personal leave per year under the National Employment Standards — the same as permanent employees.
How to Calculate and Pay
Personal leave for casuals is calculated the same way as for permanent employees:
- Accrual rate: 10 days ÷ 52 weeks = 0.192 days per week
- Or: 1.923 hours per week (assuming 38-hour working week)
For a casual working variable hours:
- If they work an average of 20 hours/week
- Personal leave accrual: 1.923 hours × (20 ÷ 38) = 1.01 hours per week
- At $30/hour: $30.30/week accrual
Practical Application
Unlike annual leave, personal leave for casuals is typically not paid as a regular loading. Instead:
- The casual accrues personal leave as a balance
- When the casual requests sick leave, it’s deducted from their balance
- Paid at the ordinary rate of pay (no loading)
This means casuals must have their personal leave balance tracked in a leave management system.
Public Holidays for Casuals
Entitlement
Casual employees are entitled to paid leave on public holidays that fall on a day they would normally work.
How to Pay
If a public holiday falls on a day the casual would normally work:
- They are entitled to payment at the ordinary rate of pay (not the casual loading)
- Payment is: ordinary hourly rate × ordinary hours for that day
Example: A casual normally works 20 hours/week on Mondays and Wednesdays. If ANZAC Day falls on a Monday, they are entitled to 10 hours at $30/hour = $300.
If a public holiday falls on a non-working day (e.g., Saturday), the casual is generally not entitled to payment in lieu unless the award specifies otherwise.
Penalties for Working on Public Holidays
If a casual is required to work on a public holiday, they are entitled to:
- Ordinary rate of pay + penalty loading (e.g., 150% or 200% depending on award)
- Not the casual loading + penalty; just the penalty on top of ordinary rate
Example: A casual works on ANZAC Day at the ordinary rate of $30/hour with a 150% penalty:
- Ordinary rate: $30
- Penalty: $30 × 1.5 = $45
- Total: $75/hour
Superannuation for Casuals
Casual employees are entitled to superannuation contributions if they earn at least $270/week (as of 2026; this threshold is indexed annually).
Contributions must be:
- 11.5% of ordinary time earnings (as of 2026; indexing to 12%)
- Paid to the superannuation fund of the employee’s choice
- Made within 28 days of the end of each quarter
Many employers misunderstand casual super: It’s not optional, and it’s not part of the casual loading. You must contribute even if the casual is paid a high rate.
Parental Leave for Casuals
Casual employees are entitled to 12 months of unpaid parental leave if they have worked for the organization for at least 12 months.
The 12-month period can include casual work, so a long-term casual may be eligible.
Key Differences: Casual vs. Permanent
| Entitlement | Permanent | Casual |
|---|---|---|
| Annual Leave | 4 weeks/year, accrued | 4 weeks/year, typically paid as loading or on demand |
| Personal Leave | 10 days/year, accrued | 10 days/year, must be tracked and deducted |
| Public Holidays | Paid at ordinary rate | Paid at ordinary rate (not loading) |
| Superannuation | 11.5% (mandatory, indexed) | 11.5% (if earning 270+/week, mandatory, indexed) |
| Job Security | Unfair dismissal protections | Limited protections |
| Termination Notice | 1-4 weeks depending on service | Often none required (check award) |
Common Mistakes with Casual Leave
1. Not Paying Annual Leave
Many employers assume casuals don’t get annual leave. They do. You must calculate and pay 7.69% (or equivalent) for annual leave.
2. Confusing Annual Leave with Casual Loading
The casual loading is meant to compensate for lack of job security. It’s separate from (though sometimes bundled with) annual leave. Ensure the loading covers both.
3. Not Tracking Personal Leave
Personal leave for casuals must be tracked just like permanent employees. If you don’t have a leave management system, this tracking will be manual and error-prone.
4. Not Paying the Ordinary Rate for Public Holidays
Casuals must be paid at the ordinary rate (not the casual loading) for public holidays and public holiday penalties.
5. Forgetting Superannuation
If a casual earns 270+/week, you must contribute superannuation. It’s not optional, and it’s a common underpayment issue.
6. Misclassifying Permanents as Casuals
If someone is working regular hours and has some job security, they may be entitled to permanent status even if you hired them as casual. The Fair Work Commission uses a multi-factor test to determine true casualness.
Record Keeping for Casuals
You must keep records for each casual employee:
- Hours worked each week
- Hourly rate paid
- Annual leave accrued and paid
- Personal leave accrued and taken
- Public holidays worked and penalties paid
- Superannuation contributions made
Retain these records for at least 3 years.
Calculating Casual Pay (Example)
Let’s say you have a casual working variable hours:
Week 1: 15 hours at $30/hour base
Payments for Week 1:
- Base pay: 15 × $30 = $450
- Annual leave (7.69%): 15 × $30 × 0.0769 = $34.61
- Personal leave (1.923 ÷ 38 × 15): 15 × $30 × 0.0759 = $34.16
- (Or, casuals often get a loading that bundles these: 15 × $30 × 1.25 = $562.50)
- Superannuation (if earning 270+/week): $450 × 0.115 = $51.75
Total pay: $450 + $34.61 + $34.16 + $51.75 = $570.52 (or $562.50 if using loading + super separately)
Key Takeaways
- Casual employees ARE entitled to annual leave, personal leave, and public holidays
- Annual leave is typically paid as a weekly loading (7.69%) or paid out separately
- Personal leave must be tracked as a balance
- Public holidays are paid at the ordinary rate, not the casual loading
- Superannuation is mandatory for casuals earning 270+/week
- Misclassifying permanents as casuals is a common compliance issue
- Keep detailed records of all casual payments and leave
Non-compliance with casual leave entitlements is one of the Fair Work Ombudsman’s top enforcement priorities. Ensure your payroll system accurately calculates and pays all casual leave entitlements.
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