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RP1987(Newbie)Newbie
24 Nov 2023

I'm selling my business with the Purchaser taking on the existing employees, their entitlements and service periods. However one of our staff has asked to cash out their long service leave entitlements in their final pay with us. Can this be taxed under the un-used leave provisions for a genuine redundancy. Their employment with our company is ending as the business has been sold.

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370 views
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PayrollDeanne(Taxicorn)Taxicorn
ATO Certified Response27 Nov 2023

Hiya @RP1987 👋


It is a cashout of leave in service as the employee is still employed through the transfer of business. Cashout of leave in service is marginally taxed as per this ATO guidance (bottom of the page).


Deanne

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PayrollDeanne(Taxicorn)Taxicorn
ATO Certified Response27 Nov 2023

Hiya @RP1987 👋


It is a cashout of leave in service as the employee is still employed through the transfer of business. Cashout of leave in service is marginally taxed as per this ATO guidance (bottom of the page).


Deanne

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Can cash out of leave entitlements on sale of business be taxed as redundancy? | ATO Community