Leave Loading

Leave Loading

Leave Loading


Full-time and part-time permanent workers are entitled to a minimum of 4 weeks of paid annual leave for every 12 months of continuous service, based on their ordinary hours of work. Shift workers are entitled to 5 weeks of paid annual leave

Leave Loading:
  • is an extra payment on top of an employees annual leave pay, to compensate them for expenses during annual leave
  • it is usually 17.5% of the employees normal pay
  • is paid at the employees ordinary rate of pay when an employee takes annual leave. This does not include any overtime, penalty rates, allowances or bonuses
  • only pay leave loading if it is outlined in the employee's award or workplace agreement.
  • Visit the Fair Work Commission site for more information about an award or workplace agreement for employees or call the Fair Work Info line on 13 13 94
  • Click on the following ATO link for more information: Leave Loading 

To Set Up Leave Loading:

Step 1: Add Leave Loading as a New Pay Rate item

  • Payroll toolbar option
  • Setup Lists tab
  • Pay Rates tab
  • Add

 Step 2: Setup Pay Item for Annual Leave Loading

  1. Name - 'Annual Leave Loading
  2. Per - select 'Pay' from the drop down list
  3. Hrs/Units - leave blank
  4. Rate - '0.1750'
    Note: Day workers are usually entitled to a 17.5% annual leave loading calculated on the ordinary weekly rate of pay
  5. Super - don't tick 
    Click on the following ATO link for more information: Superannuation Guarantee (SG) Contributions Calculator
  6. Taxable - tick. Any leave loading attracted by annual leave in an advance leave payment is to be added to the total leave payment when calculating the withholding
  7. Optional Cashbook Account - this will automatically default to Include with wages. Click on the Allocate to radio dial if another account has been set up specifically for leave loading
  8. Click OK to save
 

Example

Here is an example of how to enter an Annual Leave pay with leave loading:
Example: Employee, John Brown, who is paid fortnightly, earns $1,000 a week ($2,000 a fortnight - 80 hours @ $25/hour) and is taking 4 weeks annual leave. He will receive a leave payment of $4000 for four weeks leave. The annual leave attracts leave loading at the rate of 17.5% per pay, which increases the total leave payment by $700 to $4,700
 
Add the pay:
  • Still in Payroll
  • Click Employees tab
  • Double click on the employee who is being paid - John Brown
  • Click Add Pay
  • Click Wages/ Salary tab
  • Select Annual Leave from the Pay Type drop down list
  • Per - Pay - Annual Leave should already exist as a Pay Rate as part of your original Cashbook setup
  • Hrs/Units - '160' - John Brown work 80 hours/fortnight, 160 hours/4 weeks
  • Rate - '25' - John Brown's normal pay rate
  • Total - will calculate at 4,000.
  • Note: Super and Taxable should be ticked
  • Next line: Select Annual Leave Loading from the Pay Type drop-down list
  • Per - Pay - auto-fill
  • Hrs/Units - enter the Total amount of the Annual Leave
  • Rate - 0.175 - auto-fill
  • Total - will calculate to 700 
  • Note: Super should not be ticked, Taxable should be ticked

  • Click Summary tab
  • Click OK to save
 
  • Click Yes to the information message: 'Do you want to add this pay into your cashbook'
  • Click OK to record the transaction in Cashbook
  • Click Close


Article ID 402