Casual Conversion Cost Calculator

The decision you're actually pricing

Eligible casual employees have a pathway under the Fair Work framework to convert to permanent employment, and employers have obligations around offering or responding to conversion — the Fair Work Ombudsman publishes the current rules and timeframes. But beyond compliance, conversion is a cost and retention decision, and most owners guess at it. The honest comparison is: what does this person cost per year as a casual, versus as a permanent employee on equivalent hours?

Inputs to gather

• The award or agreement covering the role — it sets the base rates, the casual loading, penalty rates for both casual and permanent staff, and any leave loading. Use your award's current published rates; they change at least annually.
• Actual hours worked — pull a representative period from payroll, including when the hours fall (evenings, weekends, public holidays), because penalty-rate differences between casual and permanent staff drive much of the answer.
• Superannuation — payable on ordinary time earnings in both scenarios at the current statutory rate.
• Leave entitlements — permanent staff accrue annual leave and personal/carer's leave; check whether your award adds leave loading on annual leave.

The method

Step 1 — Annualise the casual cost

For each category of hours (ordinary, evening, weekend, public holiday), multiply hours by the casual rate for that category — which already includes the casual loading — then add super. Sum the categories for the year.

Step 2 — Annualise the permanent cost

Run the same hours through the permanent rates for each category, add super, then add the accrual cost of leave: annual leave and personal leave accrue as a percentage of the working year, plus leave loading where the award provides it. If the role would qualify for redundancy pay and paid notice down the track, note those as contingent costs rather than annual ones.

Step 3 — Compare like for like

The gap between the two totals is the direct cost difference. It's often smaller than owners expect: the casual loading exists precisely to compensate for the leave and security a permanent employee gets, so the two structures are designed to land in the same neighbourhood.

Step 4 — Price the soft factors

Now weigh what the spreadsheet can't: permanent staff are typically easier to retain and roster, and conversion signals commitment; casuals give you flexibility if demand is genuinely variable. Turnover has a real replacement cost — recruitment, training, lost productivity — and if conversion cuts turnover in a hard-to-fill role, that alone can dominate the wage-line difference.

Reading the result

• Permanent slightly dearer: normal, once leave accruals are counted. Ask whether the retention and reliability gain covers the gap.
• Casual dearer: common where lots of hours attract high casual penalty rates — conversion may save money outright.
• Roughly equal: decide on workforce stability, not cost.

Whatever the numbers say, the conversion obligations themselves aren't optional — eligibility, notification and response requirements sit with the Fair Work Ombudsman, and getting the process wrong creates risk even when your maths is right.

Keep it repeatable

This calculation is worth rerunning whenever award rates change or an employee's pattern shifts — which is easiest when rostering, payroll and employment records live in one joined-up system rather than three. That's the difference a connected back office makes to decisions like this one. General information only — for a specific employee, check your award's current rates and the Fair Work Ombudsman's conversion rules, or get advice.