Casual to Permanent: What Happens to Your Leave Entitlements When You Convert

Published: January 2026 | Reading time: 9 minutes

The shift from casual to permanent employment represents a significant milestone in many Australian workers' careers. This conversion opens the door to workplace entitlements that casual employees don't receive, including the valuable benefit of annual leave. However, understanding exactly how this transition affects your entitlements, including what happens to the casual loading you've been receiving, is essential for making informed decisions about conversion.

This comprehensive guide explains the casual conversion process, how your annual leave entitlements begin after conversion, and important financial considerations to keep in mind as you transition from casual to permanent status.

Understanding Casual Conversion Rights

Under the Fair Work Act 2009, eligible casual employees have the right to request conversion to permanent employment. The legislation provides two main pathways for conversion: employer-initiated offers and employee-initiated requests. Understanding both pathways helps you know what to expect and when to act.

For larger businesses (15 or more employees), employers are required to assess casual employees after 12 months of employment and offer conversion to those who have worked a regular pattern of hours over the past six months that could continue as a permanent employee. If the employer believes there are reasonable grounds not to make an offer, they must inform the employee in writing of those grounds.

Regardless of employer size, employees have the right to request conversion after working for an employer for at least 12 months, provided they've worked a regular pattern of hours during at least the last six months of that period. The employer can only refuse the request on reasonable business grounds, such as the employee's position being redundant or significant changes to working hours in the foreseeable future.

Some awards and enterprise agreements contain additional or different conversion provisions that may be more favorable than the minimum standards. Always check your specific award or agreement to understand the exact rules that apply to your situation.

When Annual Leave Accrual Begins

One of the most significant changes when converting from casual to permanent employment is the commencement of annual leave accrual. As a casual employee, you don't accrue annual leave because you receive a casual loading (typically 25%) as compensation for missing out on leave entitlements and other permanent employee benefits. Once you convert to permanent status, this changes immediately.

Annual leave begins accruing from the date your permanent employment commences. If you convert on 1 July, you start accumulating leave from that date forward. The accrual rate is four weeks per year for full-time employees or a pro-rata amount for part-time employees based on your ordinary hours. From your very first week as a permanent employee, you're building your annual leave balance.

Importantly, your time as a casual employee with the same employer does not count toward annual leave accrual retrospectively. You won't receive credit for any annual leave covering your period of casual employment. The casual loading you received during that time was the compensation for not accruing leave. Once you convert, you start fresh with zero accrued annual leave and begin building from there.

Use our annual leave calculator to track your leave accrual from your permanent employment start date. This helps you understand exactly how much leave you've accumulated since conversion and plan your time off accordingly.

The Casual Loading Trade-Off

Understanding the financial implications of conversion is crucial for making an informed decision. As a casual employee, you receive a casual loading on top of your base hourly rate. This loading, typically 25%, compensates you for not receiving annual leave, personal leave, public holiday pay, and other permanent employee entitlements. When you convert to permanent employment, you generally lose this loading.

The financial comparison isn't always straightforward. While permanent employees receive a lower hourly rate without the loading, they gain valuable entitlements that have real monetary value. Four weeks of annual leave at your base rate is worth approximately 7.7% of your annual salary. Personal leave, public holiday pay, and other entitlements add further value.

For employees who consistently work regular hours and plan to stay with their employer long-term, permanent employment often provides better overall value despite the lower hourly rate. The security of paid time off when you're sick, guaranteed income during annual leave, and other benefits can outweigh the casual loading. However, for those who value flexibility and higher immediate cash payments, remaining casual might be preferable.

Consider your personal circumstances, including your financial situation, career plans, and how you value different types of compensation, when deciding whether conversion is right for you.

Impact on Other Leave Entitlements

Annual leave isn't the only entitlement affected by casual to permanent conversion. Understanding the full picture helps you appreciate the value of permanent status. Personal leave, also known as sick leave, begins accruing at ten days per year from your conversion date. Like annual leave, there's no retrospective credit for your casual period.

Public holiday entitlements also change. As a permanent employee, you're entitled to be absent on public holidays without loss of pay, provided the day falls on a day you would ordinarily work. You're also generally entitled to substitute days if a public holiday falls during your annual leave. As a casual, you weren't paid for public holidays unless you worked, though you could decline to work.

Compassionate leave and family and domestic violence leave become available upon conversion, providing paid time off for serious family situations. These entitlements offer important security that casual employment doesn't provide.

Long service leave treatment during conversion varies by state and territory. In some jurisdictions, your casual service may count toward long service leave eligibility after you convert to permanent employment. Check your state's long service leave legislation for specific rules about counting casual service.

Practical Steps for a Smooth Transition

If you're considering or have been offered casual conversion, several practical steps help ensure a smooth transition. First, carefully review the offer or your request terms. Understand the hours you'll be working, your new hourly rate without casual loading, and exactly what entitlements you'll receive.

Calculate the financial impact by comparing your current casual income with projected permanent income, factoring in the value of leave entitlements. Consider how you use your casual loading money. If you're already saving it for holidays or sick days, conversion might suit you well. If you rely on it for regular expenses, you'll need to adjust your budget.

Confirm the exact date your permanent employment will commence. This date is when your annual leave and other entitlements begin accruing. Keep this date recorded for future reference when calculating your leave balances or discussing entitlements with your employer.

Discuss any concerns or questions with your employer before finalizing conversion. Understand how your roster might change, whether your duties will remain the same, and what happens if circumstances change in the future. Getting clarity upfront prevents misunderstandings later.

Conclusion

Converting from casual to permanent employment opens access to annual leave and other valuable workplace entitlements that provide security and work-life balance. While you won't receive credit for your casual service period, your annual leave begins accruing from day one of permanent employment, building toward your first paid holiday as a permanent employee.

Carefully consider the trade-offs between casual loading and permanent entitlements based on your personal circumstances. For many workers, the stability and benefits of permanent employment provide greater long-term value than the higher hourly rate of casual work.

Track your new annual leave entitlement from your conversion date using our free annual leave calculator. Watching your leave balance grow is a tangible benefit of your new permanent status and helps you plan that well-deserved first holiday as a permanent employee.