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Some workplaces include an entitlement called leave loading. Sometimes called holiday leave loading or annual leave loading, this entitlement is paid in addition to an employee's base rate of pay when they take annual leave. Leave loading is generally paid at a rate of 17.5% of an employee's regular pay, but can vary.
Check the leave loading guidelines on the Fair Work website.
AccountRight has a wage category called Annual Leave Loading (or Holiday Leave Loading) which you can use. This category is based on 17.5% leave loading.
Let's show you how to assign the leave loading category to your employees, and how to pay loading when an employee takes leave.
- Go to the Payroll command centre and click Payroll Categories.
- On the Wages tab, click the zoom arrow to open the Leave Loading category.
- If you report to the ATO through Single Touch Payroll, select the applicable ATO Reporting Category. If unsure, check with your accounting advisor or the ATO. Learn more about assigning ATO reporting categories for Single Touch Payroll reporting.
- Click Employee (at the top of the window).
- Select the employees entitled to leave loading then click OK.
- If needed, adjust the Pay Rate. By default it's set to 0.1750 which is 17.5% of the regular pay rate.
- If you have a separate expense account to track leave loading payments, select the Optional Account option and select the account.
- Click OK.
Start a pay run as you normally would. You can then enter the leave hours against the annual leave and leave loading wage categories.
Here's an example where an employee is taking 15.2 hours annual leave. This means we've also entered 15.2 hours against the leave loading wage category.
Continue to process the pay as normal. For a refresher, see Processing your payroll.
Leave loading FAQs
Is super calculated on leave loading?
By default, the leave loading wage category in AccountRight is excluded from super calculations. To clarify if your leave loading payments should accrue super, check with your accounting advisor or the ATO.
If your leave loading payments need to accrue super:
- Go to the Payroll command centre and click Payroll Categories .
- Click the Superannuation tab.
- Click the zoom arrow to open the Superannuation Guarantee category.
- Click Exempt and deselect the leave loading wage category.
- Click OK, then click OK again.
Why is too much annual leave accruing when paying leave loading?
This can occur if your annual leave entitlement is calculated on a percentage of gross hours. To check, go to Payroll > Payroll Categories > Entitlements tab > open the Annual Leave Accrual category.
Here's an example where the annual leave accrual is calculated on a percentage of gross hours.
If your annual leave accrual is set up this way and you want to exclude leave loading from accruing leave:
- Click Exempt on the Entitlements Information window (as shown above).
- Select the Annual Leave Loading wage category. This will ensure this wage category is excluded from annual leave accrual.
- Click OK then click OK again.
You may also need to repeat these steps for your personal/sick leave entitlement category if leave loading should be exempted from there too.