Casual vs permanent: which pays more?
What the 25% casual loading is really worth once you count leave.
Key points
- The casual minimum wage is $33.05 an hour, including the 25% loading.
- Working the same days, a casual earns roughly 6% more, not 25%.
- Divide a casual rate by 1.25 to compare it with a permanent rate.
- Permanent work brings paid leave, notice, redundancy pay and easier loan approval.
- After 6 months (12 for a small business), casuals can ask to become permanent.
Casual employees usually get a 25% loading on top of the permanent hourly rate, in place of paid leave, notice and redundancy pay. It looks like a big pay rise, but once you count four weeks' annual leave, sick leave and public holidays, the gap is much smaller. Here's how to compare a casual and a permanent job fairly.
Convert an hourly rate to a salary
What each one gets
Using the adult national minimum wage from 1 July 2026, $26.44 an hour:
| Permanent full-time | Casual | |
|---|---|---|
| Hourly rate | $26.44 | $33.05 |
| Paid annual leave | 4 weeks | None |
| Paid personal/carer's leave | 10 days | None (unpaid carer's leave only) |
| Paid public holidays | Yes, when rostered | No, unless worked (then penalty rates) |
| Notice and redundancy | Yes | No |
| Super (12%) | Yes | Yes |
What the loading is really worth
A permanent full-timer is paid for 52 weeks a year but, after 4 weeks' annual leave, about 10 public holidays and (if they use it) 10 days of personal leave, works about 220 days. A casual working the same 220 days earns:
| Over a year | Permanent | Casual |
|---|---|---|
| Days actually worked | 220 | 220 |
| Pay before tax | $52,245 | $55,260 |
| Pay per day actually worked | $237.48 | $251.18 |
So at the same base rate the casual earns about $3,014 more a year, around 6% more, not 25%. Many awards also pay permanent staff a 17.5% annual leave loading, worth about $703 a year at this rate, which narrows the gap further. If the permanent employee rarely takes sick leave, the casual's advantage is a little bigger.
The rule of thumb
To compare a casual rate with a permanent one, divide the casual rate by 1.25. A casual job paying $40 an hour is roughly equal to a permanent job paying $32. Then weigh up the things money doesn't cover:
- Security. Casual hours can be cut with little notice, and there's no redundancy pay.
- Home loans. Many lenders want casuals to have 6 to 12 months in the same job before they'll count the income. See borrowing power.
- Flexibility. Casuals can usually decline shifts and take unpaid time off when they like.
- Penalty rates. Casual penalty rates on weekends and public holidays are often higher. Check your award with the penalty rates calculator.
Becoming permanent
Under the Fair Work Act "employee choice" pathway, a casual who has worked for the employer for at least 6 months (12 months for a small business) and believes their job no longer fits the definition of casual (for example, because they work a regular, predictable pattern of hours) can notify the employer in writing that they want to become permanent. The employer can only refuse on fair and reasonable operational grounds. The Fair Work Ombudsman has the details.
Tax and super
Casuals pay tax the same way as permanent employees: claim the tax-free threshold from only one employer. Employers must pay 12% super on ordinary time earnings, including the casual loading. See what you'd take home on the hourly pay tables.
Frequently asked questions
What is the casual loading in Australia?
Usually 25% on top of the permanent hourly rate under modern awards. It's paid instead of annual leave, personal leave, notice and redundancy pay.
Is casual pay better than permanent?
At the same base rate, a casual working the same days earns roughly 6% more a year once you count the permanent worker's paid leave and public holidays, not 25%. Permanent work brings security and easier loan approval.
How do I compare a casual rate with a salary?
Divide the casual hourly rate by 1.25 to get the equivalent permanent rate, then multiply by 1,976 (38 hours × 52 weeks) for a full-time salary.
What is the casual minimum wage from 1 July 2026?
The adult national minimum wage is $26.44 an hour, so the casual minimum including the 25% loading is $33.05. Many awards set higher minimums.
Sources
- Fair Work Ombudsman: casual employees
- Fair Work Ombudsman: minimum wages
- Fair Work Ombudsman: becoming a permanent employee
More guides
Last reviewed October 2026. This guide is general information only. It isn't financial, tax, credit or legal advice and doesn't consider your circumstances. Rules change, so check the official sources below or speak to a licensed professional before you make a decision.