Hiring Casuals in Australia: A Legislative Maze with Extra Paperwork

I have specialized in payroll for a while - so this discussion always surprises me on the compliance around Casual employees.

Obviously business owners think " I need some help, I will hire a casual, This will be easy — a few shifts here and there, no biggie."

Then someone like me goes "Cool how will you calculate their Penalties and Leave" And the business owner is stunned. If I had a dollar for every time I had to argue that Casuals are entitled to Penalty Rates and some Leave I probably wouldn't need to process payroll for a living.

But chatting (fighting) with me is more desirable for you than having a conversation with FWA, which might look like:

"Have you issued a Casual Employment Information Statement?"
"Do they have a reasonable expectation of ongoing work?"
"Have you considered conversion to permanent?"

Suddenly, you're not running a café. You're running a compliance obstacle course sponsored by the ATO.

Let's unpack some of the "myths" around casual employment, shall we?

What are Casuals Entitled to:

An Award rate? Seriously Business Owners - we have a minimum wage in Australia and Awards for most Industries as well as legislation that says you need to pay AT LEAST that. Casuals get a casual Loading of 25% on top of that. Will do the Maths for you; minimum wage in Australia in 2025 is $24.16 per hour plus 25% means if you are paying a casual less than $30.20 an hour expect to deal with FWA.
The Loading - it is outdated to say that that 25% loading is for the absence of Leave. Casuals are entitled to some leave provisions see below. They are also entitled to Overtime so just have the 25% as the amount we pay to casuals for them being amazingly flexible for our business.
Overtime - in Point 1, I said we have minimum wage in Australia. Minimum wage means absolute minimum. Most Awards will dictate to us what the "Industry Rate" is. So you should always look at the Award relevant to your business. It is probably more than minimum wage. FWA only comes knocking if you are Under this so just be generous with your wage, it will pay in the long run. These Awards will also tell you that any worker working before 6 am in the morning is a deadset legend and needs a early morning penalty for that, since you are not out of bed yet as the business owner it somehow now seems logical that even Casuals get that little extra if outside "normal instances" that is what penalties are and yes Casuals are entitled also. Don't worry your Award will help you out with this.
Leave - it is the biggest misconception that Casuals don't get Leave - they do and some of it is even paid. Casuals are entitled to the following leave (yes as a minimum, yes your Award will break this down for you more precisely. 2 days unpaid carer's leave per occasion

2 days unpaid compassionate leave per occasion
10 days paid family and domestic violence leave per year
Paid Long Service leave.
Unpaid community service leave.

Parental Leave (mostly unpaid but can be paid sometimes)

What does the business Owner Need to Do.

Firstly, getting over the idea of hiring anyone is easy. Australia has too much legislation for that. I focus on the nice side of it, if my daughter went to work what would I want her to experience in the workplace so that is my guide into HR and my employees.

But I have drawn up a quick list to get you thinking of things you should do for your casual employees.

Provide "Casual Employment Information Statement" – or the CEIS (a.k.a. The Casual Bible)

Before your new hire even picks up a mop, you're legally required to give them the CEIS — a document that basically says:

"You're casual."
"We can cancel your shifts."
"But if you hang around long enough, you might stop being casual."

It's the work equivalent of saying: "We're not exclusive... but let's see where this goes."

Check your Casual Is a Casual Employee?

According to the Fair Work Act, a casual employee is someone who:

Has no guaranteed hours,
Works irregularly,
Is paid a casual loading (hello, 25%),
And knows they're casual — which, let's be honest, they often don't until they want sick leave and realise they have to just suffer quietly.

And if that wasn't clear enough — don't worry. Fair Work has 42 pages of guidance that clears absolutely nothing up. But you could use the duck test "if it looks, sounds and acts like a duck it probably is a duck".

Offer Casual Conversion – "Surprise! You Might Be Permanent Now!"

After 6 months (12 for big businesses), your casual employee might be entitled to request permanent part-time employment.

Yes, that's right. The person who told you they "just want a flexible gig to fit around their DJ side hustle" can suddenly request holiday pay, sick leave, and a parking spot with their name on it.

And if you don't respond in writing within 21 days? You might accidentally ghost them into permanent employment.

https://www.fairwork.gov.au/starting-employment/types-of-employees/casual-employees/becoming-a-permanent-employee/offers-and-requests-for-casual-conversion

Rosters, Contracts, and Prayers

You must:

Give them a proper employment contract.
Record their hours accurately.
Not accidentally make them look like a permanent staff member (e.g., regular hours every week for 2 years and a birthday cake with their face on it). See duck test above.
Not break into a cold sweat every time the Fair Work website updates.

Casuals might be "flexible," but legally, they come with more strings attached than a puppet show run by the ATO.

Superannuation and PAYG: Because You Can't Just Pay Cash in a Cardboard Box Anymore

Pay them superannuation (11% as of 2024, because why not!),
Deduct PAYG tax (cheers, ATO),
And report everything via Single Touch Payroll (STP), which sounds like a dating app but is actually a government requirement that judges you weekly.

Penalties for Getting It Wrong: A Love Letter from the Fair Work Commission

Messed up a payslip?
Missed a loading?
Didn't convert someone when you should have?

No worries — just expect a firmly worded letter, backpay requests, or an invoice large enough to make your coffee machine cry.

Final Thoughts

Hiring casuals in Australia isn't impossible… It's just like assembling IKEA furniture with legal jargon instead of allen keys. You can do it — but you'll Google "Fair Work penalties" more than you'd like to admit.

The trick? Probably best to just treat your casuals as mini permanents, after all that is how our law feels. Stay up to date, keep everything in writing, and remember: behind every cheerful casual shift worker is a small business owner drowning in compliance and hoping Fair Work never calls.

Seems like a lot - Outsource! My job is to stay on top of legislation, your business might arrange flowers, stick to what you know, get help for what you don't. When it comes to HR and Payroll software the market is flooded with good options for some or all of this job. Reach out happy to chat.