Hi,
I'm hoping someone can help.
An employee requested to split final payment into the following;
Payment 1 – Days worked
Payment 2 – Leave entitlements and notice period
Payment 3 – Redundancy package
Should employer accommodate, is this considered legal and compliant for tax purposes?
Thank you!
Hiya @yubieverano 👋
Employers are bound by their Fair Work legislative obligations about the final pay. Note that, whilst the Fair Work Ombudsman defines "best practice" as within 7 days, a recent court ruling deemed that to be the final day of employment. LSL is governed by the state/territory. Most of them say you must pay on the final day of employment.
If you choose to pay the ETP later, please understand the rules. Typically, employees ask for the payments to be spread out because they believe it will give them a tax advantage. It won't!
Deanne
Hiya @yubieverano 👋
Employers are bound by their Fair Work legislative obligations about the final pay. Note that, whilst the Fair Work Ombudsman defines "best practice" as within 7 days, a recent court ruling deemed that to be the final day of employment. LSL is governed by the state/territory. Most of them say you must pay on the final day of employment.
If you choose to pay the ETP later, please understand the rules. Typically, employees ask for the payments to be spread out because they believe it will give them a tax advantage. It won't!
Deanne
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