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KellieH(Initiate)Initiate
4 Nov 2021

Hi - Is there a maximum PAYG withholding amount on an Annual Leave payout? When using the marginal tax rate calculation method on an AL payout it is totalling slightly higher than 50% in tax. Would this be correct or is there a maximum payg amount? Thank you

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RenATO(Community Support)Community Support
4 Nov 2021

Hi @KellieH,


It's hard to say if the calculation for the 50% or higher in tax withholding is correct without having all the information. Though I can refer you to our calculation pages available for unused leave payouts.


The calculation differs as to whether the employee is leaving because of Genuine Redundancy (maximum withholding is 32%) or Leaving employment for other reasons. You can refer to both links provided for examples and information on how to calculate the withholding, to confirm the amounts you calculated are correct.

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Most helpful reply

RenATO(Community Support)Community Support
4 Nov 2021

Hi @KellieH,


It's hard to say if the calculation for the 50% or higher in tax withholding is correct without having all the information. Though I can refer you to our calculation pages available for unused leave payouts.


The calculation differs as to whether the employee is leaving because of Genuine Redundancy (maximum withholding is 32%) or Leaving employment for other reasons. You can refer to both links provided for examples and information on how to calculate the withholding, to confirm the amounts you calculated are correct.

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PAYG on Annual Leave payout - employee resigned | ATO Community