We have an employee who wants to cash in his Long Service Leave (he is not leaving the company). Do I pay Super on this cash out?
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10,137 views1 replies
1 replies
10,137 views
1 replies
Hiya @Denise10 👋
Yes, as per the ATO SGR 2009/2 P36 that states:
36. Lump sum arrears payments of unused leave or salary or wages otherwise than on termination of employment are also OTE.
Cashout of leave in service is an "arrears payment" because it accrued prior to the payment date. Also note, that cashout of leave in service is marginally taxed, as per the ATO Business > PAYG Withholding guidance. Note the paragraph near the bottom of the page that states:
If a continuing employee receives a payment for unused leave, with or without leave loading, use Tax table for back payments, commissions, bonuses and similar payments.
The link to that tax table is at the bottom of the page, that defines the methods of marginal tax.
And lastly, in STP2, you report the payment as Paid Leave-C (cashout of leave in service).
Just thought I'd cover all the bases! 😉
Deanne
All replies
Hiya @Denise10 👋
Yes, as per the ATO SGR 2009/2 P36 that states:
36. Lump sum arrears payments of unused leave or salary or wages otherwise than on termination of employment are also OTE.
Cashout of leave in service is an "arrears payment" because it accrued prior to the payment date. Also note, that cashout of leave in service is marginally taxed, as per the ATO Business > PAYG Withholding guidance. Note the paragraph near the bottom of the page that states:
If a continuing employee receives a payment for unused leave, with or without leave loading, use Tax table for back payments, commissions, bonuses and similar payments.
The link to that tax table is at the bottom of the page, that defines the methods of marginal tax.
And lastly, in STP2, you report the payment as Paid Leave-C (cashout of leave in service).
Just thought I'd cover all the bases! 😉
Deanne