Hiya @jerrychokes 👋
When it comes to these kinds of "compensation for loss of job" payments, there are two parts:
- period of time - years of service is defined in S83-170 of the ITAA 1997 as "the number of whole years in the period, or sum of periods, of employment to which the payment relates" that will reflect start date to end date. Your employment basis is not a factor in the years of service calculation. There are no decimals or rounding up in the calculation of "whole years". That is, 1.9 = 1 whole year; 2.3 = 2 whole years.
- rate of payment - the rate of payment as at the end date, unless your employer voluntarily chooses a higher rate. Note how this differs from other types of payments, such as LSL, where there may be state/territory legislation to determine what the payment rate must be that is not just "as at" the end date. For example, average over 12 months or 5 years.
There are the standard entitlement payments, as per your employment conditions, that may be paid out upon termination, such as:
- Payment in Lieu of Notice - instead of working out your notice period, you are paid a lunp sum instead. How this is classified to determine the tax, super and reporting obligations depends on a number of factors, starting with the reason for termination
- Unused Leave on Termination - annual leave, long service leave and leave loading entitlements. How these balances are classified to determine the tax and reporting (no super on unused leave on termination) will depend on a number of factors, starting with the reason for termination.
- Other Payments - such as the "compensation for loss of job" payment referenced in the first section of my response. Depending on the reason for termination and total amount compared with ATO thresholds, those payments may be Lump Sum D (no tax) and/or ETPs. Final pay may also include other types of time balances that are not leave, but are payable on termination, such as any RDO's, TOIL etc. Those payments are ETPs. How these payments may be classified for tax and reporting will depend, at least, on the reason for termination.
It's best to seek assistance from your employer about what your final pay may be. You can also see the Fair Work Obmudsman to understand final pay.
Deanne
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