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tmccracken(Initiate)Initiate
29 Jan 2025

It is clear that superannuation is not payable on annual leave lump sum payments on termination, but unclear whether a transition to a casual status is considered termination.


Payroll programs will require a termination in order to process a final payment, but it is confusion as I have come across other reputable websites claiming that cashing out annual leave as a lump sum is required to have superannuation paid (?) potentially due to continuity of employment (?) not sure if that's accurate either.

1,406 views
2 replies
1,406 views
2 replies

Most helpful response

Most helpful reply

PayrollDeanne(Taxicorn)Taxicorn
29 Jan 2025

Hiya @tmccracken ๐Ÿ‘‹


If you've been searching on the ATO website, then that's why you haven't found the answer! It's not an ATO matter, it's in the Fair Work Ombudsman's wheelhouse and there's no ambiguity whatsoever about your Fair Work obligations ๐Ÿ˜‰


Cashing out leave in service is absolutely OTE and SG is payable, as per ATO SGR 2009/2 paragraph 36.


Many full time or part time employees who anticipate soon changing to casual employment either take the absences or request a cash-out of leave (cannot cashout full leave balanace unless your Award/Agreement stipulates it can, as Awards typically require a remaining balance safety net) as absences and cashout of leave in service are OTE and SG is payable.


As you state, unused leave on termination is not OTE and therefore SG is not payable. ๐Ÿ˜‰


Deanne

All replies

Most helpful reply

PayrollDeanne(Taxicorn)Taxicorn
29 Jan 2025

Hiya @tmccracken ๐Ÿ‘‹


If you've been searching on the ATO website, then that's why you haven't found the answer! It's not an ATO matter, it's in the Fair Work Ombudsman's wheelhouse and there's no ambiguity whatsoever about your Fair Work obligations ๐Ÿ˜‰


Cashing out leave in service is absolutely OTE and SG is payable, as per ATO SGR 2009/2 paragraph 36.


Many full time or part time employees who anticipate soon changing to casual employment either take the absences or request a cash-out of leave (cannot cashout full leave balanace unless your Award/Agreement stipulates it can, as Awards typically require a remaining balance safety net) as absences and cashout of leave in service are OTE and SG is payable.


As you state, unused leave on termination is not OTE and therefore SG is not payable. ๐Ÿ˜‰


Deanne

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Is Superannuation payable on unused annual leave paid on transition to casual and/or cashing out AL? | ATO Community