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Re: Would unused annual leave included in redundant payment be taxed?

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Newbie

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Replies 1

Hi there,

My last job was made redundant due to covid 19. The last pay includes unused annual leave. Should unused annual leave be taxed?

Thanks

1 ACCEPTED SOLUTION

Accepted Solutions
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Best answer

Devotee

Replies 0

Yes. Lump sum payments for unused annual leave and long service leave don't form part of your ETP. Unused leave amounts are separately recorded on your income statement or PAYG payment summary – individual non-business at lump sum A or B.

These payments may be concessionally taxed. The tax rate depends on the type of termination, date of accrual and type of leave.

https://www.ato.gov.au/Individuals/Working/Working-as-an-employee/Leaving-your-job/Employment-termin....
1 REPLY 1
Highlighted

Best answer

Devotee

Replies 0

Yes. Lump sum payments for unused annual leave and long service leave don't form part of your ETP. Unused leave amounts are separately recorded on your income statement or PAYG payment summary – individual non-business at lump sum A or B.

These payments may be concessionally taxed. The tax rate depends on the type of termination, date of accrual and type of leave.

https://www.ato.gov.au/Individuals/Working/Working-as-an-employee/Leaving-your-job/Employment-termin....