Annual Leave, Public Holidays and Leave Loading in Australia - What Overseas Employers Need to Know

Annual leave and public holidays are the two NES entitlements that generate the most questions from our overseas clients. On the surface they seem simple. Four weeks leave, a handful of public holidays. Easy enough.

Then you discover that public holidays vary by state, change year to year, and can actually be moved to a different day by agreement. Here's what you actually need to know.

Annual leave - the basics

Every full-time Australian employee is entitled to four weeks of paid annual leave per year under the NES. Part-time employees accrue on a pro-rata basis. Casual employees don't accrue annual leave but are compensated through a 25% casual loading on their hourly rate instead.

A few things make it more nuanced than it first appears.

Annual leave accrues progressively throughout the year, not in a lump sum on a set date. An employee who has been with you for six months has already accrued two weeks of leave and that leave is theirs. It doesn't expire. Unused leave accumulates and must be paid out when employment ends, which means a long-serving employee with a large leave balance represents a real financial liability on the books.

Employees can also accrue excessive leave balances, generally considered to be more than eight weeks, and under most Modern Awards employers have the right to direct employees to take leave in those circumstances. Managing leave balances actively rather than letting them accumulate is good practice.

Leave loading - worth knowing but often not relevant

Leave loading is an additional 17.5% payment on top of ordinary pay when annual leave is taken. It is not an NES entitlement - it applies under most Modern Awards and certain enterprise agreements.

For most of the clients we work with at Employer of Record Australia, this doesn't come into play. The professional roles we typically onboard are award-free, meaning leave loading doesn't apply. But it's worth confirming at onboarding rather than assuming, and it's something we check as part of every engagement setup.

Public holidays - not a single national list

This is where it gets genuinely complicated for overseas businesses.

Australia has 8 national public holidays that apply everywhere: New Year's Day, Australia Day, Good Friday, Easter Saturday, Easter Monday, Anzac Day, Christmas Day and Boxing Day. Beyond those eight, every state and territory adds its own, bringing the total to between 9 and 13 days per employee depending on where they're based.

The King's Birthday is a public holiday in every state but falls on a different date in almost every one of them. Labour Day falls on different dates in Queensland, Victoria, NSW and Western Australia. And it changes year to year - in 2026, Anzac Day falls on a Saturday, meaning most states do not observe a substitute Monday, but ACT and WA do. An employee in Canberra and an employee in Brisbane doing the same job have different public holiday entitlements that year.

For a business managing an Australian team from overseas, staying across this without local knowledge is the kind of thing that's easy to get quietly wrong.

Substituting public holidays by agreement

One thing worth knowing that many overseas employers aren't aware of: a public holiday can be moved to a different day by agreement between the employer and employee. If a public holiday falls on a day that doesn't suit the business or the employee, both parties can agree in writing to substitute it for another day. This gives some useful flexibility, particularly for businesses operating across different time zones where a public holiday mid-week can create scheduling challenges.

The substitution needs to be genuinely agreed and documented. It can't be imposed unilaterally by the employer.

What employers are obligated to do on public holidays

Employees are entitled to be absent from work on public holidays and to be paid at their ordinary rate for the hours they would have worked. If you need an employee to work on a public holiday, you can request it but you cannot require it unreasonably, and penalty rates will typically apply under the relevant award or agreement.

TL;DR

Full-time employees get four weeks of paid annual leave per year, accruing progressively from day one. Unused leave doesn't expire and must be paid out at the end of employment. Leave loading of 17.5% applies to most award-covered employees but is less commonly relevant for the senior professional roles typically engaged through an EOR. Public holidays vary by state, ranging from 9 to 13 days per year, on different dates, and can be substituted to a different day by written agreement between employer and employee.

At Employer of Record Australia, leave entitlements are set up correctly from day one and managed throughout the employment relationship, including accurate accruals on every payslip and state-specific public holiday management.

If you'd like to talk through what that looks like for your business specifically, reach out!

Jasmin Robertson is Operations Director at Employer of Record Australia, a Brisbane-based EOR, sponsorship and recruitment business helping global companies hire in Australia.