I finished my work with my previous employer, which is a NFP organization. I started to utilize the salary sacrifice($15,900 annual tax free cap) since I joined the business. My last pay includes the unused annual leave payout but the payroll manager told me I cannot sacrifice the annual leave and only the normal pay can be sacrificed as per ATO's rules.
Can I please ask if the above is correct?
Hiya @lena311 ๐
Yes, you can only salary sacrifice FUTURE income that includes the accrual of leave. If your salary sacrifice arrangement wasn't in place prior to the accrual of the leave that is unused on termination, then it cannot be sacrificed.
Read the ATO guidance for employers on effective salary sacrifice arrangements.
Deanne
Hiya @lena311 ๐
Yes, you can only salary sacrifice FUTURE income that includes the accrual of leave. If your salary sacrifice arrangement wasn't in place prior to the accrual of the leave that is unused on termination, then it cannot be sacrificed.
Read the ATO guidance for employers on effective salary sacrifice arrangements.
Deanne
I have a similar question, but I'm finding your response contradictory. I have an employee that has resigned. Salary Sacrifice is in place. For his termination payout of annual leave accrued, can I deduct the remainder of the $15,900 from his leave payout?
Hiya @rebeccaa ๐
How is it contradictory to specify that your salary sacrifice must be in place prior to the accrual of leave that is paid? Straight from the ATO website.
Additionally, "salary and wages" can be sacrificed. In STP2, if all you had paid the employee in a financial year was Lump Sum A and ETPs, if you tried to report salary sacrifice as well, you would get the error message about you cannot have negative YTD gross.
Deanne
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