If you work a casual job in Australia — pouring coffees, stacking supermarket shelves, or picking up shifts in hospitality and healthcare — you may have noticed your hourly rate looks a little higher than a permanent employee doing the same work. That difference is called casual loading, and under most modern awards it adds 25% on top of the ordinary hourly rate. It is not a bonus, and it is not your employer being generous. It is compensation for everything casuals go without: paid annual leave, paid sick leave, notice of termination, and redundancy pay.
In this guide we explain how casual loading works in Australia, how the 25% is calculated, what it compensates for, and how casual pay compares with permanent pay once leave entitlements are factored in. All figures use the National Minimum Wage from 1 July 2025 — $24.95 per hour.
What Is Casual Loading?
Casual loading is an extra amount added to the ordinary hourly rate of a casual employee. Under most modern awards in Australia the loading is 25%, which means a casual is paid 125% of the base hourly rate a permanent employee would receive for the same work under the same award.
The loading exists because casual employment is fundamentally different from permanent employment. Casuals have no guaranteed hours, no ongoing commitment from their employer, and none of the paid leave entitlements permanent staff receive. The 25% loading is the trade-off at the heart of the arrangement: a higher hourly rate in exchange for less security and no paid leave.
It is important to understand that casual loading is part of your ordinary pay, not a separate bonus sitting on top of it. It is included in your gross wages, it is taxed as ordinary income, and it flows through into calculations such as penalty rates and superannuation.
What Does the 25% Compensate For?
The 25% figure is not arbitrary — it is designed to make up for specific entitlements that casual employees do not receive. Here is what the loading covers:
- Paid annual leave: full-time permanent employees receive 4 weeks of paid annual leave each year. Casuals receive none.
- Paid sick and personal leave: permanent employees accrue 10 days of paid personal leave per year. Casuals receive none.
- Notice of termination: permanent employees must be given notice (or payment in lieu of notice) when their employment ends. Casual employment can generally end without notice.
- Redundancy pay: permanent employees may be entitled to redundancy pay if their role is made redundant. Casuals are not entitled to redundancy pay.
In short, the loading is the price of flexibility: more for every hour you work, but nothing when you don’t — no paid holidays, no paid sick days. This is the comparison that matters when people ask whether casuals are “better off”: dollars per hour versus paid time off and job security.
How the 25% Loading Is Calculated
The calculation itself is straightforward:
Casual hourly rate = ordinary hourly rate × 1.25
Using the National Minimum Wage from 1 July 2025, which is $24.95 per hour:
$24.95 × 1.25 = $31.19 per hour
That $31.19 is the minimum legal casual rate in Australia — the lowest amount any casual employee can be paid for an ordinary hour of work. Most awards set base rates above the minimum wage, and the same 25% formula applies on top of whichever base rate your award sets.
The table below shows illustrative examples of how the 25% formula works at different base rates:
| Ordinary hourly rate | 25% loading | Casual hourly rate |
|---|---|---|
| $24.95 (national minimum wage) | $6.24 | $31.19 |
| $25.00 | $6.25 | $31.25 |
| $30.00 | $7.50 | $37.50 |
| $35.00 | $8.75 | $43.75 |
To run your own numbers from any base rate and roster, try our free casual loading calculator — it works out your loaded hourly rate, weekly pay, and annual pay in seconds.
One important caution: while 25% is the standard loading under most modern awards, some awards set a different percentage, and enterprise agreements can vary it too. Always check the casual loading clause in your specific award on the Fair Work Ombudsman website rather than assuming 25% applies to you.
Casual vs Permanent: The Real Numbers
At first glance casual pay looks clearly better — $31.19 an hour versus $24.95 an hour for the same work. But the comparison only becomes fair when you look across a full year and factor in paid leave. Here is how the two compare at minimum-wage rates, both working 38 hours a week for 52 weeks:
| Permanent full-time | Casual | |
|---|---|---|
| Hourly rate | $24.95 | $31.19 (incl. 25% loading) |
| Gross weekly pay (38 hrs) | $948.10 | $1,185.22 |
| Gross annual pay | $49,301.20 | $61,651.28 |
| Paid annual leave | 4 weeks | None |
| Paid sick / personal leave | 10 days | None |
| Notice of termination | Yes | No |
| Redundancy pay | Possible | No |
The casual worker takes home about $12,350 more in gross pay over the year — but the permanent worker receives roughly six weeks of paid time off (4 weeks annual leave plus 10 days personal leave) while still being paid, along with a predictable roster and job security.
Neither arrangement is universally better; it depends on what you value. If you want maximum cash per hour and shifts that fit around study, casual work has obvious appeal. If you want paid holidays, paid sick days, and certainty about next month’s income, permanent employment is hard to beat. Compare the full package, not just the hourly rate.
Worked Pay Examples
Here is what the minimum casual rate of $31.19 per hour looks like across common working patterns, compared with a permanent employee on the $24.95 base rate:
| Hours per week | Casual weekly pay (at $31.19/hr) | Permanent weekly pay (at $24.95/hr) |
|---|---|---|
| 20 hours | $623.80 | $499.00 |
| 30 hours | $935.70 | $748.50 |
| 38 hours | $1,185.22 | $948.10 |
A casual working 20 hours a week at the minimum loaded rate earns $623.80 a week, or $32,437.60 over a full year. For an annual breakdown of an ordinary hourly wage, see our hourly/25 guide showing what $25 an hour works out to across the year, and the hourly/30 guide for a $30-per-hour wage. And to calculate your own loaded rate from any base rate and roster, use the casual loading calculator.
Penalty Rates, Overtime and Super
Casual loading is not the only extra a casual employee can earn. Under most awards, casuals are also entitled to penalty rates for evening, weekend, and public holiday work, plus overtime rates when they work beyond ordinary hours. The casual loading generally stacks with penalty rates according to the rules of your award — which is why weekend, evening, and public holiday shifts can pay far more than the base $31.19 rate.
On superannuation: the 12% super guarantee applies to casual wages just as it does to permanent wages. Your employer must pay super on top of your pay — it is never deducted from your wages — and there is no minimum monthly earnings threshold. The old rule that excluded employees earning under $450 a month was abolished on 1 July 2022, so even a single short shift attracts super contributions.
Casual Conversion: When Can You Go Permanent?
If you have been working as a casual for a while and would prefer the security of permanent employment, the National Employment Standards give you a pathway. A casual employee who has been employed for at least 12 months can request conversion to permanent (full-time or part-time) employment.
Your employer must respond to the request and can only refuse on reasonable grounds — for example, if your hours are genuinely irregular and unlikely to continue in a permanent pattern. Conversion does not happen automatically; you need to ask. If permanency matters to you, it is worth raising the conversation once you hit the 12-month mark.
Tax on Casual Loading
Casual loading is taxable ordinary income. It is included in your gross wages, your employer withholds PAYG tax from it like any other pay, and at tax time it is taxed at the normal 2025–26 resident tax rates:
| Taxable income | Tax on this income |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
On top of income tax, most taxpayers also pay the 2% Medicare levy. So a casual earning the minimum loaded rate full-time — about $61,651 a year — would pay roughly $9,283 in income tax plus about $1,233 in Medicare levy, before any deductions or offsets.
A part-time example: a casual working 20 hours a week at the minimum loaded rate earns $32,437.60 a year, which falls in the 16% bracket — roughly $2,278 in income tax plus about $649 in Medicare levy.
Frequently Asked Questions
Is casual loading 25% for everyone?
Not quite. A 25% loading is the standard under most modern awards and applies to the National Minimum Wage, but some awards set a different percentage and enterprise agreements can vary it. Look up your specific award on the Fair Work Ombudsman website and check the casual loading clause.
Does casual loading include super?
No — super is separate and paid on top. Casual loading is part of your wages, and your employer must pay an additional 12% super guarantee on those wages. Super is never deducted from your pay; it is an extra amount your employer pays into your super fund.
Do casuals get overtime?
Yes. Casual employees are entitled to overtime and penalty rates under their award, just like permanent employees. The casual loading typically stacks with penalty rates according to award rules — which is why weekend, evening, and public holiday shifts can pay so much more than ordinary weekday hours.
Can a casual ask to become permanent?
Yes. Under the National Employment Standards, a casual employed for at least 12 months can request conversion to permanent employment. Your employer can only refuse on reasonable grounds, such as genuinely irregular hours unlikely to continue. You do need to make the request — conversion is not automatic.
Is casual loading taxed?
Yes. Casual loading is ordinary taxable income. Your employer withholds PAYG tax from it each pay cycle, and it counts toward your total taxable income at tax time, taxed at the normal 2025–26 resident rates plus the 2% Medicare levy. It is not tax-free, and it is not taxed at any special rate.
Why do casuals get paid more per hour than permanent staff?
Because the higher rate replaces paid entitlements. A permanent employee’s lower hourly rate comes bundled with 4 weeks of paid annual leave, 10 days of paid sick leave, notice of termination, and possible redundancy pay. The casual’s 25% loading is compensation for going without all of that — more cash per hour, but no paid time off and no job security.
The Bottom Line
Casual loading is simple in concept and important in practice: a 25% boost to your hourly rate that stands in for paid leave, notice, and redundancy entitlements. At the current National Minimum Wage it turns $24.95 an hour into $31.19 an hour — and over a full-time year, the gap between a casual and a permanent pay packet is roughly $12,350 before tax.
Whether casual work is the right deal for you depends on what you value: maximum hourly pay and flexibility, or paid leave and security. Either way, know your award, check that the correct loading is applied to every ordinary hour, and remember that super and penalty rates sit on top of your loaded rate.
Want to see your own numbers? Plug your base rate and weekly hours into our free casual loading calculator for an instant breakdown of your loaded hourly rate, weekly pay, and annual pay.