Hi,
My employer provides paid parental leave benefit .
I am taking 3 months, and they advised it is paid as a lump sum.
Will they allocate the tax withheld over the 3 month period (Oct, Nov, Dec) or am i going to get whacked with a massive tax withheld component the month i get the lump sum?
Thanks in advance.
Hiya @Mjb136 👋
It depends how they are advancing the leave: net pay advance or gross advance, like a bonus.
If it's net, they just give you the net pay you'd receive each pay during the period of absence, where the tax was your normal tax each pay.
If it's gross, the ATO requires them to calculate marginal tax on the "bonus" lump sum.
If it's not in their documented policy, ask payroll. 😉
Deanne
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