Guide
Super on annual leave loading: is it payable?
Updated
The default is that super is payable on leave loading. The exception is narrow and needs paperwork you either have or do not.
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How this calculator works
- Leave loading is not a universal statutory entitlement. The Fair Work Ombudsman states that annual leave loading is an additional amount paid to some employees when they take annual leave. It does not apply to all employees, and depends on what their award or enterprise agreement says (Fair Work Ombudsman: payment for annual leave).
- The Fair Work Ombudsman's library article says the annual leave loading amount and what it is calculated on varies based on the individual award or agreement. Its examples are not a full list of every way loading is calculated.
- Source: Fair Work Ombudsman library: annual leave loading in awards and agreements. That is why the percentage is a field rather than a fixed 17.5%.
- Many awards require a comparison rather than a flat payment. In the library article's Retail Award example, non-shiftworkers get the higher of two amounts. One is a 17.5% loading calculated on the employee's minimum hourly rate; the other is the weekend or shift penalty rates they normally get. The penalty field here models that comparison.
- Whether loading is calculated on an above-award rate or on the award minimum depends on the wording of the clause. The library article gives both patterns, so check yours before assuming the higher base.
- Annual leave itself is paid at the employee's current base pay rate for all hours of leave taken. That does not include overtime rates, penalties, allowances or bonuses (Fair Work Ombudsman). The loading sits on top of that base.
- Loading may not apply at all in three cases, all covered by the library article. It may be absorbed into an annualised wage arrangement permitted by the award or agreement, varied by an individual flexibility arrangement, or offset under a contractual arrangement.
- Superannuation generally applies. The ATO states that annual leave loading is included in ordinary time earnings unless it is clearly linked to lost overtime. Excluding it needs written evidence, such as the award, the agreement, or a documented policy stating the reason for the entitlement (ATO).
- Figures are gross. PAYG withholding on leave loading is a separate question and depends on how and when it is paid, so ask your payroll team rather than assuming a rate.
The ATO's rule
The ATO states that annual leave loading is included in ordinary time earnings unless it is clearly linked to lost overtime. Source: ATO: superannuation on annual leave loading.
The same treatment carries into the qualifying earnings framework from 1 July 2026. The ATO's list excludes annual leave loading clearly linked to a lost opportunity to work overtime, and includes every other kind (ATO: what payments are qualifying earnings).
Is super paid on annual leave itself?
Yes. The ATO's table of paid leave lists annual leave as ordinary time earnings, so superannuation is paid on it as on ordinary hours worked. Source: ATO: list of payments that are ordinary time earnings.
The qualifying earnings list from 1 July 2026 says the same. Annual leave counts, and so does every annual leave loading not clearly linked to a lost opportunity to work overtime. Source: ATO: what payments are qualifying earnings, both read 30 October 2026.
What written evidence the ATO accepts
To omit annual leave loading from the calculation, the ATO says an employer needs written evidence showing the loading is linked to a lost opportunity to work overtime. It accepts either the relevant award or agreement, or a documented policy, understood by employer and employees, that states the reason for the leave loading entitlement.
The ATO's own example is a company whose policy stated that annual leave loading under a specified clause compensates for the lost opportunity for overtime. The exception was where the award indicates otherwise. The company confirmed that reading with union representatives before treating day workers differently from shift workers.
What this means for your figures
- If nothing in writing links your loading to lost overtime, assume super is payable on it.
- A verbal understanding is not enough. The ATO asks for the award, the agreement, or a documented policy.
- The exclusion is not all-or-nothing across a workforce: the ATO's example applies it to day workers but not shift workers.
- Super on loading is calculated at the superannuation guarantee rate, 12% for 2026-27, alongside the rest of the employee's qualifying earnings.
| Treatment | Loading amount | Super at 12% on the loading |
|---|---|---|
| Loading is qualifying earnings (the default) | $931 | $112 |
| Loading clearly linked to lost overtime, with written evidence | $931 | $0 |
The loading figure comes from this site's calculator at $35 an hour, 38 ordinary hours and four weeks. The super column is 12% of it, at the superannuation guarantee rate the ATO publishes for 2026-27.
Getting this wrong is expensive in one direction only. Under-paying super attracts the superannuation guarantee charge; over-paying it does not. If your evidence is thin, the safe treatment is to include the loading.