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Re: Jobkeeper & Unused annual leave on Final pay

Initiate

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We have a client (Employer) who is enrolled in the Jobkeeper scheme. One employee who is eligible for Jobkeeper resigned in early June and gave 4 weeks notice. During the 4 weeks, the employee went on sick leave for week 1-3, and week 4 she asked for unpaid leave as she used up all her sick leave balance. In week 4, her pay includes the final pay for her unused annual leave which is over $1,500 (The unused annual leave does not form part of the ETP as it is not a genuine redundancy, invalidity or early retirement.) Does the employer still need to make topup payments for Jobkeeper purpose. Can the final pay for the unused annual leave count towards the minimum for Jobkeeper payments. Also, since week 4 ended on 28 Jun 2020 which is only half of a Jobkeeper fortnight, can the employer still get full Jobkeeper payment of $1,500 as they paid over $1,500 even if the employee is no longer with the employer in the second week of the Jobkeeper fortnight?

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Most helpful response

Former Community Support

Replies 1

Hi again @CissyShi 

Sorry, that probably shows how old I am thinking that 1993 was only yesterday!

You are right, unused leave after Aug 1993 is included in gross payments. So all your employer needs to do is pay this employee as they would normally in this circumstance prior to JobKeeper (their normal salary from work they did plus the unused annual leave etc). If that final payment is under $1500 then they would  need to top up but if it is over then the employer would only be reimbursed $1500 even if the payment to the employee was more.

I hope that makes sense and clears this up. Again my apologies for my "ageist" slip in thinking in my previous post.

4 REPLIES 4

Former Community Support

Replies 3

Hi @CissyShi 

No, lump sums such as Lump Sum A (unused annual leave for example) do not count towards the $1,500 per fortnight. So the employer will still need to pay the $1500 before tax minimum and then pay the lump sum on top of that.

As for the employee ceasing work halfway through a JobKeeper fortnight, as long as the employer paid the $1500 (before tax) minimum to the employee in that fortnight then yes, they can claim reimbursement of that $1500.

Hope this information helps.

Initiate

Replies 2

Thanks for your reply. 

 

I am aware that lump sum A along with some other ETP has been excluded from the Jobkeeper scheme, but with the lump sum payments, my understanding is that unused annual leave accrued on or after 18 August 1993 should be included at Gross Payments, not Lump Sum A. The example in this ATO link is suggesting the same: https://www.ato.gov.au/Forms/Withholding-from-unused-leave-payments-on-termination-of-employment/?an...

 

This employee I am talking about, her leave is all accrued after 18 August 1993. Does this make any difference? Does my client still need to make topup payment?

 

Thanks

 

Most helpful response

Former Community Support

Replies 1

Hi again @CissyShi 

Sorry, that probably shows how old I am thinking that 1993 was only yesterday!

You are right, unused leave after Aug 1993 is included in gross payments. So all your employer needs to do is pay this employee as they would normally in this circumstance prior to JobKeeper (their normal salary from work they did plus the unused annual leave etc). If that final payment is under $1500 then they would  need to top up but if it is over then the employer would only be reimbursed $1500 even if the payment to the employee was more.

I hope that makes sense and clears this up. Again my apologies for my "ageist" slip in thinking in my previous post.

Initiate

Replies 0

Thanks heaps, that's clear now.