Hi,
We have an employee who will cease part-time employment and will be working on a casual basis starting next month.
He currently has a salary sacrifice in place and now he's asking whether he is allowed to have a portion of his unused annual and long service leave upon termination paid into super, in addition to his monthly salary sacrifice, and ideally prior to any tax paid on payout?
Thanks and regards,
Sarah
Hi @V279,
Unfortunately, your employee won't be able to do this unless the arrangement was setup prior to them earning the leave. Each salary sacrifice arrangement needs to meet the requirements of an effective arrangement. A requirement of this is that the arrangement is setup prior to earning the entitlement. If the leave has already been earnt without an arrangement for this in place, they won't be able to do it.
Hi @V279,
Unfortunately, your employee won't be able to do this unless the arrangement was setup prior to them earning the leave. Each salary sacrifice arrangement needs to meet the requirements of an effective arrangement. A requirement of this is that the arrangement is setup prior to earning the entitlement. If the leave has already been earnt without an arrangement for this in place, they won't be able to do it.
Hi Ethan,
Thanks for your response, that is really helpful.
Just a follow up question - our employee has had a salary sacrifice arrangement in place for many years (and continues to have) and this salary sacrifice has been applied and paid into his super for all leave and taken to date. Does he need a separate agreement/arrangement specific for his unused annual/long service leave upon termination to be salary sacrificed before he's allowed to do so? He plans to use the same percentage level as his current salary sacrifice, and is prior to any tax paid before payout.
Thanks and regards,
Sarah
Hi @V279,
If the salary sacrifice arrangement has been in place since commencement of employment, then all unused annual leave and all unused long service leave could be salary sacrificed. However, if the arrangement was not in place say from 3yrs after commencement of employment, then the first 3yrs of accrual of unused annual leave and unused long service leave, would not be part of the salary sacrifice arrangement.
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