A casual pay slip that says “ordinary hours plus loading” can still sit on a ledger that treats the person as a cheap permanent. Leave accrues in the software because someone left the default on. Super is calculated on a base that forgot the loading, or included it twice. At termination the file either pays unused leave that was never an entitlement, or refuses a loading the award expected on every ordinary hour.

This is a bookkeeping essay about casual loading, leave, and the shape of the file. It is not a Fair Work advice line, and it is not a substitute for the award. The National Employment Standards set the floor. The award or registered agreement sets the rate. We will not invent a loading percentage. If you need the number, open the award that actually covers the person and read the casual clause.

The original Bookkeeping Centre ran pays for cafés, clinics, warehouses and associations. The same mistake travelled: a casual was set up as “wages, 38 hours, accrue leave” because that was the first employee template in the file.

What a casual is, on the books

A casual employee is engaged as a casual and paid a loading instead of the paid leave and other permanent entitlements the NES and the award describe. They do not accrue paid annual leave or paid personal leave. They do not sit on a leave-liability account. Their ordinary pay, including the loading, is an expense in the fortnight you paid it.

That is the ledger test. If your balance sheet is growing an annual-leave provision for people you call casual, the file is lying about at least one of those words.

Employment basis in Single Touch Payroll Phase 2 must say casual. Phase 2 is mandatory. Coding them as part-time so the leave screen looks familiar is a Phase 2 miscode, and it will pre-fill a story the employee’s tax return and a later inspector will both read.

Hours matter. A casual slip should show the hours and the rate, including the loading, in language the employee can check against the roster. A single “casual pay” lump with no hours is a file that cannot answer a query.

Loading is ordinary pay, not an allowance you invented

Casual loading is part of the casual’s ordinary hourly rate for ordinary hours. It is not a bonus. It is not a separate “other allowance” you created so the base rate looks like the permanent rate. For STP, it generally lives inside ordinary / Gross earnings, not in an allowance type you picked because the software offered a box.

For Super Guarantee, the loading that is part of ordinary casual pay is generally part of ordinary time earnings. From 1 July 2025 SG is 12 per cent of OTE, subject to the current ATO maximum contribution base. From 1 July 2026 that 12 per cent is paid under payday super. If your pay item pays a casual rate inclusive of loading and you have unticked super on the loading component, you have invented a split the ATO did not ask for.

Read ordinary time earnings before you assume a casual penalty (as opposed to the casual loading) is superable. Saturday penalties and overtime are a different question from the casual loading on ordinary hours. The award tells you which hours are ordinary. We will not guess.

Do not invent the loading percentage. Awards differ. Some agreements differ again. A bookkeeper who types “25” because that is what the last café used is inventing a Fair Work rate. Open the award. If the employee is award-free, the contract must still state the casual rate and that it includes compensation for the paid leave they are not accruing.

Permanents: the other side of the same coin

A full-time or part-time employee is paid a permanent rate and accrues paid annual leave and paid personal leave as the NES and the award provide. The ledger should show:

• wages expense for the fortnight
• a leave-expense and leave-liability movement when you recognise accrual (many small files only see the cash wage and then a lump at Christmas; a better file accrues)
• no casual loading

If you pay a “loading” to a permanent because “they wanted casual money but we made them part-time”, you have not invented a new category. You have a classification problem. Either they are casual, with loading and no leave accrual, or they are permanent, with leave and no casual loading. Paying both is how you double-count the compensation the loading was meant to replace.

Annual leave taken by a permanent is paid leave, not ordinary Gross in the Phase 2 sense of ordinary hours worked. Use the paid-leave income type. Unused leave paid on termination is unused leave on termination, not a last casual-style lump. Those two miscodes are in the STP essay because they still sit in files that otherwise understand casuals.

Conversion, regular patterns, and the date the file must notice

Casual conversion — a casual who becomes permanent after a regular pattern of work — is a Fair Work topic first and a payroll topic the same afternoon. We will not restate the current eligibility tests; those pages move. When a conversion happens, the file has a date.

On that date:

• change employment basis from casual to part-time or full-time
• switch off casual loading
• switch on leave accruals from the conversion date, not from the original start date unless advice says otherwise
• change the ordinary rate to the permanent rate in the award or agreement
• write a note on the employee record: converted on this date, under this clause or request

Do not leave them as casual in STP “until the next financial year” because changing the template is fiddly. Do not accrue leave backwards through the casual period unless you have been told to and you can explain why. A conversion is not a time machine. It is a change of basis.

If the owner has casuals who have worked the same three shifts for three years and nobody has mentioned conversion, that is not a bookkeeping decision. Flag it. Do not silently recode them. Point the owner at Fair Work’s current casual conversion material and at their adviser. Then wait for an instruction you can file.

How the ledger should look, in two columns

For casuals:

• Dr Casual wages (ordinary hours including loading)
• Dr Casual overtime / penalties (separate, named)
• Cr PAYG withholding payable
• Cr Bank
• Dr Superannuation guarantee expense (12 per cent of OTE)
• Cr Super payable (cleared on payday from 1 July 2026)
• no leave liability

For permanents:

• Dr Wages
• Dr Annual leave expense (if you accrue)
• Cr Annual leave liability (if you accrue)
• Dr Superannuation guarantee expense
• Cr PAYG and Bank as above
• no casual loading account

If you only have one account called “Wages”, you cannot see whether loading is rising because you hired casuals or because you gave permanents a rise. The chart of accounts should at least split ordinary casual and ordinary permanent. Overtime and penalties can live together if you never manage them separately; loading should not disappear into “allowances”.

Job-costing a casual onto a site means burdening the wage with SG and workers compensation, not with a fictional leave loading. Job-costing a permanent may include a leave burden if you want the job to carry the true employment cost. Mixing those burdens is how a job P&L starts lying about which crew is cheaper.

Awards, NES and the things we will not invent

The NES gives casuals a set of protections and denies them paid annual and personal leave. Awards add loading, minimum engagements, penalty rates, and sometimes extra clauses about conversion or rostering. We will not quote a minimum engagement, a penalty percentage or a loading here. Those numbers are the award’s job. A journal that prints them as if they were eternal is how a 2024 rate survives into a 2026 pay run.

Practical habit:

• assign the award or agreement on the employee record
• store a PDF of the classification page you used, dated
• when Fair Work or the Commission publishes an annual wage review, diary a pay-item review — do not wait for an employee to complain
• if you use software “modern award” interpretations, still read the clause. Software is a helper, not a source of law

If the file has no award because “we pay well above”, write down the ordinary casual rate, that it includes loading in lieu of paid leave, and what ordinary hours are. “Above award” without a sentence is not a classification. It is a vibe.

Termination of a casual is not a leave payout

When a casual’s engagement ends, you generally pay the hours already worked, any outstanding allowances the award requires, and super on OTE. You do not pay unused annual leave, because there is none. You do not use the unused-leave-on-termination income type for a casual you correctly never accrued.

If the software offers a termination wizard that wants to pay annual leave, that is a sign the employee was set up as permanent. Stop. Check the basis. Check the award. Then finish the termination. Paying leave “just in case” is not conservative. It is an unauthorised payment and a wrong STP event.

If you discover at termination that a person called casual should have been permanent, stop again. That is an underpayment and classification problem, not a pay-item tweak. Get advice. Do not invent a back-pay shape on the last day because the owner wants the person gone by Friday.

A thirty-minute casual audit

Once a quarter, filter the employee list to employment basis = casual and check:

1. Leave accruals are zero, and the leave-liability account does not move for these people.
2. The pay item includes loading in ordinary earnings, not as a stray allowance.
3. Super is 12 per cent of OTE including that ordinary casual pay, within the current ATO cap.
4. STP employment basis is casual.
5. Hours on the slip can be tied to a roster or timesheet.
6. Anyone with a regular pattern for a long time has been flagged to the owner for a conversion conversation.

File the checklist with the month-end pack. It takes less time than unwinding a leave provision you should never have built.

The Rosebery desk used to say that casual is a classification, not a mood. The loading is the price of that classification. Leave is the price of the other one. The file is allowed to hold either. It is not allowed to hold a bit of both because the template was easier.