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  TAX - RATESPersonalEmployment TerminationUnused Leave Payments      Friday, 22 January 2021  

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Unused Leave Payments on Termination


Certain payments in respect of unused annual leave and long service leave are entitled to concessional tax treatment when employment is terminated.  The amounts are separately recorded on the employee’s Payment Summary and separately recorded on the tax return.

 

These payments are not Eligible Termination Payments (ETPs). 

 

 

Annual Leave

 

On resignation or retirement

PAYG summary payment code

Accrued before 18/8/93

100% included in assessable income and taxed at a maximum of 30% plus Medicare

A

Accrued after 17/8/93

100% included in assessable income and taxed at marginal rate plus Medicare

Gross

 

 

 

On bona fide redundancy, invalidity or approved early retirement scheme

PAYG summary payment code

100% included in assessable income and taxed at a maximum of 30% plus Medicare

A

 

 

 

On death

Tax-free

Not recorded

 

 

Long Service Leave

 

On resignation or retirement

PAYG summary payment code

Accrued before 16/8/78

5% included in assessable income and taxed at marginal rate plus Medicare

B

Accrued between 16/8/78 & 17/8/93

100% included in assessable income and taxed at a maximum of 30% plus Medicare

A

Accrued after 17/8/93

100% included in assessable income and taxed at marginal rate plus Medicare

Gross

 

 

 

On bona fide redundancy, invalidity or approved early retirement scheme

PAYG summary payment code

Accrued before 16/8/78

5% included in assessable income and taxed at marginal rate plus Medicare

B

Accrued after 15/8/78

100% included in assessable income and taxed at a maximum of 30% plus Medicare

A

 

 

 

On death

Tax-free

Not recorded

 

 

This page was last edited on 5 January 2021

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