Annual leave loading — usually an extra 17.5% on top of your pay while you are on annual leave — is a welcome bonus for millions of Australian workers. But a question that catches many people out is whether superannuation is paid on it. The short answer is: usually yes, but not always. It depends on why your loading is paid, and the distinction is worth real money over a career.
This guide explains the rule, works through examples, and shows how to check your own payslip. To model your super position, use the super calculator.
What annual leave loading is
Annual leave loading is an extra payment, most commonly 17.5% of your ordinary pay, added when you take annual leave. It exists because workers on leave historically missed out on overtime, shift penalties and allowances they would otherwise have earned. Many awards and enterprise agreements provide it, though not all — some agreements have “bought out” loading into a higher base rate, and some salaried arrangements do not include it at all.
For a full-time worker on $80,000, four weeks of annual leave is worth $6,153.85 in ordinary pay (4/52 of salary), and 17.5% loading on that is $1,076.92. Over a year, that loading is a meaningful sum — and whether super is paid on it determines whether roughly $129 extra lands in your super fund each year, compounding for decades.
Shiftworkers are a special case: many awards give shiftworkers five weeks of annual leave instead of four, reflecting weekend and night work patterns. The loading rules apply the same way to that extra week, and the super treatment follows the same test described below.
The super rule: it depends on why loading is paid
Superannuation guarantee (SG) is calculated on ordinary time earnings (OTE) — essentially pay for ordinary hours of work. The current SG rate is 12% of OTE, and since 1 July 2026, under Payday Super, employers must pay super at the same time as pay, calculated on qualifying earnings (which closely follow OTE).
The Australian Taxation Office’s position on leave loading is specific. Annual leave loading that is not clearly linked to lost overtime is part of OTE, so super is payable on it. Annual leave loading that is clearly demonstrated to compensate for the lost opportunity to work overtime is not OTE, so no super is payable on the loading component — though super is still payable on the underlying annual leave pay itself.
“Clearly demonstrated” is a high bar in practice. It generally requires the award, enterprise agreement, contract or a documented policy to state that the loading exists to compensate for lost overtime. If the instrument simply says “17.5% loading applies to annual leave” with no such explanation, the ATO’s default position is that super applies. In most workplaces, that means super is paid on loading — the exception is narrower than many employers and employees realise.
Worked examples
Example 1 — loading is OTE (the common case). You earn $80,000 and take four weeks of annual leave. Leave pay is $6,153.85, loading at 17.5% is $1,076.92, and total OTE for the leave period is $7,230.77. Super at 12% is $867.69 — of which $129.23 is super on the loading itself. If your employer paid no super on the loading, you would lose $129.23 for that leave period, every year.
Example 2 — loading compensates lost overtime (the exception). Your award states that the 17.5% loading is paid specifically because rostered workers lose overtime opportunities while on leave. On the same $80,000 salary, super is paid on the $6,153.85 leave pay ($738.46) but not on the $1,076.92 loading. Your super for the leave period is $738.46 — $129.23 less than in Example 1.
Example 3 — higher salary. On $100,000, four weeks of leave is $7,692.31, loading is $1,346.15, and super on the loading at 12% is $161.54 a year. Over a 30-year career, that annual difference, invested at a modest return, compounds to roughly $10,000–$15,000 in extra retirement savings. Small annual amounts matter enormously in super because of compounding — which is why checking this line on your payslip is worth doing.
| Salary | 4 weeks’ leave pay | 17.5% loading | Super on loading (12%) |
|---|---|---|---|
| $60,000 | $4,615.38 | $807.69 | $96.92 |
| $80,000 | $6,153.85 | $1,076.92 | $129.23 |
| $100,000 | $7,692.31 | $1,346.15 | $161.54 |
| $120,000 | $9,230.77 | $1,615.38 | $193.85 |
What about leave loading on termination?
When employment ends, unused annual leave is usually paid out, often with loading if your award or agreement provides it. Here the super treatment is different: lump-sum payments on termination for unused leave are generally not OTE, so super is not payable on the termination payout — including its loading component. This surprises people who have seen super paid on loading throughout their employment, but the rule follows the payment’s character: it is a termination payment, not pay for ordinary hours.
The same principle applies to other termination payments: unused sick leave payouts and genuine redundancy payments are not OTE either. If you are negotiating an exit, do not expect super on the leave payout, but do check that super was paid correctly on loading during your employment — underpayment over several years can be claimed, and the ATO can pursue unpaid SG from employers.
How to check your own payslip
Look for three lines when you take leave: base leave pay, leave loading, and the super contribution for that pay period. Add the loading to the leave pay and multiply by 12% — that is the super you should see if your loading is OTE. If the super figure matches 12% of base pay only, your employer may be treating the loading as lost-overtime compensation. That may be correct — but ask for the basis: which clause of your award or agreement states the overtime link?
Also check the timing. From 1 July 2026, Payday Super requires super to be paid at the same time as wages, so the super on your leave period should appear with that pay, not quarters later. If super on leave is consistently missing, raise it with payroll first — many cases are payroll configuration errors, not deliberate underpayment — and keep your payslips as evidence. The old $450-a-month SG threshold was abolished in 2022, so there is no minimum earnings level below which super can be skipped.
Finally, remember that super on leave loading is only one part of the picture. Super is payable on ordinary hours, shift loadings for ordinary hours, commissions and most allowances, but not on overtime itself — even overtime penalty rates. A roster heavy on overtime therefore builds less super per dollar of gross pay than the same pay earned in ordinary hours, which is another reason to model your total package with the super calculator rather than judging by gross pay alone.
Frequently asked questions
Is super paid on annual leave loading in Australia?
Usually yes. Loading is part of ordinary time earnings unless it is clearly demonstrated to compensate for lost overtime, in which case no super is payable on the loading component. Super is always payable on the underlying annual leave pay.
How much super do I get on leave loading?
At the 12% SG rate, super on 17.5% loading is about 2.1% of your leave-period pay. On an $80,000 salary, four weeks of leave generates $1,076.92 of loading and $129.23 of super on that loading.
Does the 17.5% loading apply to everyone?
No. Loading depends on your award, enterprise agreement or contract. Some agreements pay a different percentage, some have bought out loading into a higher base rate, and some salaried roles have no loading at all. Check your instrument, not a colleague’s.
Is super paid on annual leave payout when I resign?
Generally no. Unused annual leave paid out on termination is a lump-sum termination payment, not ordinary time earnings, so super is not payable on it — including any loading paid with it.
What is Payday Super and does it change leave loading?
From 1 July 2026, Payday Super requires employers to pay super at the same time as wages, on qualifying earnings. It changes when super is paid, not whether loading counts — the OTE test for loading remains the same.
What should I do if super on my loading is missing?
Raise it with payroll and ask which award or agreement clause treats the loading as lost-overtime compensation. If the answer is unsatisfactory, keep your payslips and contact the ATO about unpaid super — employers can be required to pay the shortfall plus interest.
Conclusion
Super on annual leave loading is one of those small rules with a large long-term effect: in most workplaces, 12% super is payable on the 17.5% loading, worth $129 a year on an $80,000 salary and far more compounded over a career. Check your payslip when you next take leave, ask for the award clause if it is missing, and use the super calculator to see what your leave entitlements are really worth in retirement. If you take leave every year for a full working life, the loading super alone can add thousands to your balance — money that is easy to miss, and entirely yours to claim.