What is leave loading?

November 29, 2006 1:20 AM

I am a relatively new public servant working in Queensland, Australia and I've just found out that in the pay before Christmas my 17.5% leave loading will be paid out. Great! But uh... what is it? And how much extra can I expect to find in my pay?

Q1) What is leave loading? How does it work, exactly?

Q2) How much extra will I find in my pay packet this Christmas? I understand it has something to do with how much I earn (I know that much at least) so to help you help me, I earn $2043.50 per fortnight before tax and I've been working in this job since pretty much the start of May. I've also used all my recreational leave.

posted by Second Account For Making Jokey Comments to Work & Money (10 answers total)

The 17.5% leave loading is a wonderful historic legacy from the glory days of the Labour movement actually being a potent force in Australia. The theory is this: when you are on holiday, you don't have the opportunity to work overtime, or do other things that might give you a bit extra in your pay packet each week. Ergo, the 17.5% extra represents the extra earnings that you didn't get the chance to earn.

Of course, for people who work in most salaried jobs, there isn't any overtime anyway, so the whole thing is faintly bizzare.

As to how much you get, think of it this way. Count up the days you have had by way of rec leave. Multiply that number by your daily net wage. Your leave loading is 17.5% of this amount. Assuming, of course that you haven't been getting the loading on the leave that you have already taken and this just relates to the Xmas period.

Clear as mud?
posted by tim_in_oz at 1:35 AM on November 29, 2006

While you're on leave, your rate of pay will be 117.5% of your normal rate of pay. So if your normal rate of pay is $2043.50 pf, your leave rate will be $2401.11 pf.

If you've used all of your leave, I'm not sure that you'll get leave loading over Christmas. I assume you're talking about a Christmas close-down period, as opposed to your annual leave? I'm pretty sure leave loading does not normally apply to that, but of course it will depend on the terms of your agreement.

Of course, your best bet is to join your union so that if there are any problems you'll be sorted.
posted by robcorr at 1:38 AM on November 29, 2006

Looking at tim's answer, I think I misread the question.

I'm now assuming that you've taken your four weeks (and I'm assuming it's the standard four weeks) leave, but were not paid leave loading during those weeks -- you will be paid the loading as a lump sum before Christmas.

The lump sum is 2 x 17.5% x $2043.5 = $715.22.
posted by robcorr at 1:42 AM on November 29, 2006

When you submitted your leave application(s), you would've been able to tick a box indicating whether you wanted your leave loading paid at the time (ie, increasing your pay during the period you were on leave by 17.5%). if you didn't take it then, it gets paid as a lump sum at the end of the year.
posted by obiwanwasabi at 1:54 AM on November 29, 2006

My experience as a public servant in Queensland (state, federal and university) is that you always get your leave loading on your holiday pay when you take holidays and not at some other time. And the reasoning I heard behind it is that (this can't be right - i don't know how true it is) because the employer has your holiday pay (in their bank accounts) even when you're entitled to it and don't take it for however many weeks, they are or could be earning interest on it that you could be.

Check with HR. They should know. (They might not).

Ah, you won't get leave loading on the public holidays, that is Christmas, Boxing Day, New Year's Day and the special extra holiday during closing down (1 or 1.5 days? maybe).
posted by b33j at 2:13 AM on November 29, 2006

Given that obiwanwasabi is in Canberra, that advice is probably worth more than mine.
posted by b33j at 2:13 AM on November 29, 2006

I miss leave loading.

Ergo, the 17.5% extra represents the extra earnings that you didn't get the chance to earn.

It's also in recognition of the fact that, if you do go away for holidays, you have additional expenses on top of your ordinary living expenses. The Harvester living wage was just enough to cover a family's living expenses, so leave loading funds the holidays.

Not meaning to derail, but is leave loading threatened with the workplace relations reforms? Grrrrr.
posted by goo at 6:50 AM on November 29, 2006

American here.

Wow. Just...wow.
posted by rtha at 9:27 AM on November 29, 2006

rtha -- now ask us how many weeks' holiday Australian public servants get per year.

I've never seen a box on a form asking whether I wanted leave loading paid or not. What would be the point? When would I claim it subsequently? At retirement?

Someone told me when I first discovered Leave Loading that only Australia and Sweden have it.
posted by AmbroseChapel at 4:43 PM on November 29, 2006

Both Tim and Goo are right about the "why" of leave loading. According to the ACTU:

It was in the early 1970s that the ACTU campaign for an annual leave loading began. The basis for it was that workers who worked shift work, and attracted penalty payments, did not take home less pay during their annual leave when they were not paid penalty rates.

Further, the loading was a way of compensating workers for additional expenses usually incurred during holidays (eg. travelling costs) and as compensation for the unavailability of extra sources of income while on leave (eg. overtime).

Unions in the stevedoring industry negotiated the breakthrough of a 17½% loading in 1970. In spite of earlier resistance the Commission in 1974 included a 17½% annual leave loading into all awards. In doing so they acknowledged that union campaigns had been successful in gaining acceptance of the loading by state tribunals, governments and employer associations.

I've never seen an option to have the loading component paid separately from your base leave pay. I presume it was something negotiated by the public sector union in Qld so that workers can opt for a lump sum before Christmas, which seems like a pretty good idea.
posted by robcorr at 5:19 PM on November 29, 2006