As a general proposition, yes annual leave loading can be set-off in an annualised salary.
This should be carefully documented in the employment agreement under a set-off/compensated entitlements clause.
A set-off clause should generally cover all entitlements - e.g. overtime, allowances, loadings and penalties. If you include a set-off clause, you should also ensure your employees are being paid for at least the amount they would have been paid if they were being paid award rates.