Why Do Leave Entitlements Confuse So Many Australian Businesses?

Leave entitlements confuse many employers because terms like leave accrual and leave loading sound similar but mean different things. Misunderstanding these terms leads to payroll errors, compliance risks, and employee disputes. Understanding the difference saves money and builds employee trust.

When one of Australia’s biggest banks admits to underpaying staff by hundreds of millions, it’s a wake-up call for every employer.

In Australian workplace law, awards and enterprise agreements are both legal instruments that set out minimum employment conditions – but they differ in scope, negotiation, and flexibility:

What is Payroll Tax?

Payroll tax is a state-based tax imposed on businesses when their total wages exceed a certain threshold. It’s calculated on wages paid to employees, including salaries, superannuation, allowances, bonuses, and some contractor payments.

Leave loading is an additional payment made to employees when they take annual leave, intended to compensate for the potential loss of income from not receiving regular overtime or penalty rates during their time off.

ClockOn allows you to handle one-off deductions, reimbursements, and bonuses through the pay adjustment feature during payroll processing.