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Re: Pro Rata Payout

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Hi, i have just been working out the tax on my pro rata payout (using ATO guide). I am leaving after 7 years and in SA that qualitfies for a pro rata payout (9.1 weeks).  My calculations have suggested that i will be taxed over $1,000 more for the payout than if i just took 9 weeks leave. Is this correct/normal or have i made an error in my calculations?

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ATO Certified Response

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Hi @Clarkathon,

 

Welcome to our Community.

 

It sounds like you have already referred to our tax tables and tax table for unused leave payments on termination of employment which are available on our website.

 

You may also like to consider the individual income tax rates, they may help explain why you may be taxed more when paid for unused leave. For example if you were paid 9 weeks leave in a lump sum and then commenced another job within those 9 weeks your yearly taxable income may increase as per the income tax rates.

 

When you lodge your income tax return we will work out the total tax payable based on the information you provide, your notice of assessment will advise if there is an amount to pay or a refund due.


We can provide general information here on our Community as we do not all your circumstances, if you need further information you can phone us on 13 28 61 between 8am - 6pm Monday to Friday.

 

I hope this helps, SueO

 

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Taxicorn

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Did you just leave or was it a bonafide redundancy?

 

If you just left then any outstanding long service leave or annual leave will be added to your gross salary.

 

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Most helpful response

ATO Certified Response

Community Support

Replies 0

Hi @Clarkathon,

 

Welcome to our Community.

 

It sounds like you have already referred to our tax tables and tax table for unused leave payments on termination of employment which are available on our website.

 

You may also like to consider the individual income tax rates, they may help explain why you may be taxed more when paid for unused leave. For example if you were paid 9 weeks leave in a lump sum and then commenced another job within those 9 weeks your yearly taxable income may increase as per the income tax rates.

 

When you lodge your income tax return we will work out the total tax payable based on the information you provide, your notice of assessment will advise if there is an amount to pay or a refund due.


We can provide general information here on our Community as we do not all your circumstances, if you need further information you can phone us on 13 28 61 between 8am - 6pm Monday to Friday.

 

I hope this helps, SueO