Super on paid out annual leave while still employed

(Newbie)Newbie

11 Aug 2025

A staff member has been employed on a permanent part-time basis for many years. She changed her employment status to casual during July of this year. At the final pay period on a permanent basis, she had 156 hours of unused Annual Leave. This was paid to her in a lump sum. She continues to be a casual employee of the organisation in the same role as before. She is covered by the Social, Community, Home Care and Disability Services Award

Are the hours of unused Annual Leave that were paid (with Leave Loading of 17.5%) OTE for super?

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PayrollDeanne

(Taxicorn)Taxicorn

11 Aug 2025

Hiya @Carolthree 👋

For ATO tax, super and reporting purposes, it is treated as cashout of leave in service, so is taxed marginally, OTE so super guarantee is payable and reported in STP2 as Paid Leave Type C.

It's treated this way as it doesn't satisfy the ATO legal definition of 'a payment in consequence of the termination of employment' 🤓

Deanne

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Most helpful reply

PayrollDeanne

(Taxicorn)Taxicorn

11 Aug 2025

Hiya @Carolthree 👋

For ATO tax, super and reporting purposes, it is treated as cashout of leave in service, so is taxed marginally, OTE so super guarantee is payable and reported in STP2 as Paid Leave Type C.

It's treated this way as it doesn't satisfy the ATO legal definition of 'a payment in consequence of the termination of employment' 🤓

Deanne

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