What is Annual Leave loading ?
‘Annual Leave Loading’ is the term used to denote the extra money paid to an employee on top of the annual leave amount to compensate for expenses during the annual leave period.
This practice was introduced in the 1970s with the advent of labour laws to compensate the workers who were losing out on the overtime incentives when they were on annual leave. This kind of compensation helped increase employee loyalty too, helping companies secure the best talent and keep them.
Different countries have different policies for annual leave loading as the labour laws vary a lot between countries.