Leave loading is an additional payment on top of an employee's regular salary during annual leave.
This payment is typically calculated as a percentage of the employee's base pay—commonly 17.5%—to compensate for the loss of opportunity to earn overtime or other allowances while on leave.
For example, if an employee earns $1,000 per week and takes one week of annual leave, they would receive their regular pay plus an additional $175 as leave loading.
This practice ensures that employees are financially supported during their time off.
