Most businesses decide this once, early, and then live with it for years. It is worth spending twenty minutes on, because the three engagement types are not interchangeable and the cost comparison people run in their heads is usually the wrong one.
The three types, briefly
- Full-time. Ongoing employment, generally 38 ordinary hours a week plus reasonable additional hours, with paid annual leave, paid personal leave, notice of termination and redundancy entitlements.
- Part-time. Ongoing employment with agreed regular hours below full-time, and the same entitlements as full-time on a pro-rata basis. The agreed pattern of hours matters: changing it generally requires agreement rather than a new roster.
- Casual. No firm advance commitment to ongoing work, engagement by engagement, with a loading on the base rate instead of paid leave. The loading is most commonly 25% under Modern Awards.
The comparison people get backwards
The common instinct is that casuals are more expensive because of the 25% loading. Per hour worked, that is true. Per unit of work actually needed, it frequently is not, and the reason is utilisation.
A permanent employee is paid for their contracted hours whether or not there is work in them. They also accrue annual leave and personal leave, which you fund, and they take it, which you cover. If your demand is genuinely steady, that is fine and permanent employment is usually both cheaper and better. If your demand swings, you are paying full rate for hours that produce nothing, and the loading starts looking cheap by comparison.
The honest way to settle it is arithmetic on your own roster rather than instinct. Our savings calculator runs the annual comparison with the assumptions visible and editable, and what labour hire actually costs in 2026 breaks down what sits inside an hourly rate.
When casual is the wrong answer
Casual employment is designed for work without a firm advance commitment. Where the work is in fact regular and predictable, and has been for a long time, treating it as casual is both a compliance risk and usually a retention problem. Signs you are in that territory:
- The same people work substantially the same shifts every week and have done for months.
- You would struggle to operate if any of them stopped turning up, which means you are relying on a commitment you have not made.
- Your roster is published far enough ahead that the engagement is not really shift by shift.
Both the definition of a casual employee and the pathways by which a casual can move to permanent employment are set by the Fair Work Act, and both have changed in recent years. We are deliberately not restating the current rules here, because they are the kind of detail that goes stale and because the Fair Work Ombudsman maintains the authoritative version at fairwork.gov.au. If the description above sounds like your workforce, start there and get advice on where you actually stand.
A practical decision guide
- Steady demand, specialist knowledge, long ramp-up time. Full-time. You want the person, not the hours.
- Steady but partial demand, predictable pattern. Part-time. Agree the pattern properly rather than running a permanent employee on an informal roster.
- Genuinely variable demand, short ramp-up, work that comes in peaks. Casual, and the question becomes whether you employ them yourself or through a provider.
- Variable demand plus no appetite for the payroll and compliance overhead. Casual through an Employer of Record, where the employment obligations sit with the provider. That is what MyGig does.
The most common real answer is a mix: a permanent core sized to your floor of demand, with casual capacity above it. Sizing the core to your average rather than your floor is the error that quietly costs the most, because it guarantees you are paying for idle hours in every below-average week.
Quick answers
What is the difference between a casual and a part-time employee?
A part-time employee has ongoing employment with agreed regular hours and receives paid leave entitlements on a pro-rata basis. A casual has no firm advance commitment to ongoing work and receives a loading on the base rate instead of paid leave.
Is casual loading 25%?
Most Modern Awards set casual loading at 25%, but you should check the award that applies to the role rather than assume. The loading compensates for the absence of paid leave and other entitlements that permanent employees receive.
Are casual workers more expensive than permanent staff?
Per hour worked, usually yes, because of the loading. Across a year it depends on utilisation: permanent employees are paid for contracted hours whether or not there is work in them, and they accrue leave you fund and cover. Where demand is variable, casual capacity is often cheaper overall.
Can a casual employee become permanent?
Yes. There are legislated pathways for casual employees to move to permanent employment, and the rules have changed in recent years. If you have casuals working regular ongoing patterns, get current advice on where you stand rather than relying on how it worked previously.
General information, not advice. If you are weighing a structural change to how you engage people, it is worth an hour with an employment lawyer or your accountant first, and our partner network includes firms that do exactly this.