Annual leave entitlements and leave loading are areas where NDIS and disability care providers regularly get caught out, either by underpaying leave loading, incorrectly calculating leave accruals for shift workers, or misunderstanding when the SCHADS Award rate applies.
These are the annual leave rules in the SCHADS Award (MA000100) that providers most often get wrong. Each is quoted from the Award further down, with the clause number.
| Question | What the Award says | Clause |
|---|---|---|
| Leave loading for most employees | 17.5% of the ordinary rate of pay, in addition to ordinary pay | 31.4(a) |
| Leave loading for a shiftworker | The higher of 17.5% of the ordinary rate, or the weekend and shift penalties the employee would have received had they not been on leave | 31.4(b) |
| Who is a shiftworker for leave purposes | An employee who works more than 4 ordinary hours on 10 or more weekends in the leave year, or at least eight 24-hour care shifts | 31.2 |
| Extra leave for a shiftworker | An additional week of annual leave | 31.2 |
| Cashing out leave | Only by written agreement, leaving at least 4 weeks accrued, and no more than 2 weeks cashed out in any 12 months | 31.6 |
| Excessive leave accrual | More than 8 weeks accrued (10 weeks for a shiftworker) | 31.7 |
| Untaken leave when employment ends | Paid at the amount that would have been payable had the leave been taken | Fair Work Act s 90(2) |
Most providers know the 17.5% figure. What catches them out is that the Award sets two different rules, depending on whether the employee is a shiftworker.
"(a) In addition to their ordinary pay, an employee, other than a shiftworker, will be paid an annual leave loading of 17.5% of their ordinary rate of pay.
(b) Shiftworkers, in addition to their ordinary pay, will be paid the higher of:
(i) an annual leave loading of 17.5% of their ordinary rate of pay; or
(ii) the weekend and shift penalties the employee would have received had they not been on leave during the relevant period."
Worked example for an employee who is not a shiftworker (illustrative, $30.00 an hour): a week of leave covering 38 ordinary hours is paid at 38 × $30.00 = $1,140.00 in ordinary pay, plus a loading of 17.5% × $1,140.00 = $199.50.
Worked example for a shiftworker (illustrative): the same week of leave carries the same $199.50 loading under clause 31.4(b)(i). Suppose the weekend and shift penalties the employee would have received had they been working that week came to $240.00. That is higher than $199.50, so $240.00 is the loading under clause 31.4(b)(ii). If the penalties would have been only $120.00, the 17.5% loading of $199.50 applies. How the penalty amount is measured for a particular roster is worth confirming with your payroll adviser.
Superannuation on leave loading is a question for your payroll adviser and the ATO's guidance, not the Award, so this post does not give a rule for it.
The Award defines a shiftworker for annual leave purposes by weekend work and 24-hour care shifts. It does not use public holidays:
"For the purpose of the NES, a shiftworker is: (a) an employee who works for more than 4 ordinary hours on 10 or more weekends during the yearly period in respect of which their annual leave accrues; or (b) an employee who works at least eight 24-hour care shifts in accordance with clause 25.8 during the yearly period in respect of which their annual leave accrues; and is entitled to an additional week's annual leave on the same terms and conditions."
This matters for SIL and overnight teams: a worker who regularly covers weekends or 24-hour care shifts is likely to meet the test, which changes both their leave entitlement and how their leave loading is worked out. Clause 31.3 has separate provisions for nursing assistants who moved from the Nurses Award 2020 to this Award.
Casual employees are paid the casual loading in clause 10.4 instead. The note to that clause says: "The casual loading is payable instead of entitlements from which casuals are excluded by the terms of this award and the NES." See SCHADS casual loading explained.
Section 90(2) of the Fair Work Act 2009 (Cth) provides:
"If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave."
Because the Award makes leave loading payable when leave is taken (clause 31.4), the amount "that would have been payable" includes the loading. Confirm the calculation for a shiftworker with your payroll adviser, as the loading can depend on the penalties the employee would have received.
Annual leave cannot simply be paid out instead of being taken. The Award allows it only by written agreement and within limits:
"(a) Paid annual leave must not be cashed out except in accordance with an agreement under clause 31.6.
(c) An employer and an employee may agree in writing to the cashing out of a particular amount of accrued paid annual leave by the employee.
(g) An agreement must not result in the employee's remaining accrued entitlement to paid annual leave being less than 4 weeks.
(h) The maximum amount of accrued paid annual leave that may be cashed out in any period of 12 months is 2 weeks."
"(a) An employer and employee may agree in writing to the employee taking a period of paid annual leave before the employee has accrued an entitlement to the leave."
Clause 31.5 sets further conditions, including what happens if the employee leaves before the leave is accrued. Read it in full before agreeing.
"(a) An employee has an excessive leave accrual if the employee has accrued more than 8 weeks' paid annual leave (or 10 weeks' paid annual leave for a shiftworker, as defined by clause 31.2."
If an employee has an excessive accrual, the Award provides a process for agreeing how to reduce it, and for the employer to direct leave to be taken (clauses 31.7 to 31.9). Tracking balances in hours, by employee, is the practical way to see this coming.
Leave affects the roster as much as the pay run: the shifts an employee would have worked have to be covered, and for a shiftworker the penalties they would have received feed into the loading. CareIQ manages leave requests alongside the roster, so approved leave is visible when you build the week. Leave pay and leave loading are not something to take on trust from any software: your organisation checks them against the current Award and remains responsible for pay accuracy. For a single shift, try the free SCHADS pay calculator (indicative only), or see NDIS payroll software with SCHADS rates.
Related: SCHADS penalty rates explained, SCHADS pay rates.
For an employee who is not a shiftworker, it is 17.5% of their ordinary rate of pay, paid in addition to ordinary pay (clause 31.4(a)).
Yes. A shiftworker is paid the higher of 17.5% of their ordinary rate, or the weekend and shift penalties they would have received had they not been on leave (clause 31.4(b)).
An employee who works more than 4 ordinary hours on 10 or more weekends in the leave year, or at least eight 24-hour care shifts, is a shiftworker for the Award and is entitled to an additional week (clause 31.2).
Only by a written agreement for a particular amount of accrued leave, and the employee must keep at least 4 weeks accrued. No more than 2 weeks can be cashed out in any 12 months (clause 31.6).
When they have accrued more than 8 weeks of paid annual leave, or more than 10 weeks for a shiftworker (clause 31.7).
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