Client emailed with the following query –
I am confused –
Does a Tax-Free Threshold + Leave Loading apply to a full time employee who is entitled to annual leave + personal leave loading?
As opposed to a Tax-Free Threshold + No Leave Loading? Does No L Loading apply to casual staff who are not entitled to annual & personal leave?
I just noticed the No Leave Loading in the MYOB Tax rate lists as I was manually calculating a PAYG from the ATO tax tables. When I referred back to another employee tax rate, she is classified as + leave loading. But so are casuals. Can you help?
Leave loading is 17.5% ONTOP of annual leave (was introduced in the war time to average what a worker got in overtime, so they received similar while on holidays)
Whether you select a threshold with or without the leave loading depends on the Modern Award.
And it applies to part-time and full-timers, NOT casuals at all.
As I recall, leave loading was in the Retail Award – so YES – ” a Tax-Free Threshold + Leave Loading apply to a full time employee who is entitled to annual leave + personal leave” (there is no personal leave loading)
If the award did not enforce/include leave loading, you would select Tax-Free Threshold + No Leave Loading
All your staff will be Tax-Free Threshold + Leave Loading
For Casuals, you just don’t tick on the Leave and Leave-Loading Categories in their payroll set up, at all – they don’t apply, and the correct tax rate should be calculated.
For more on leave loading, see