Taxation Administration Act 1953 - Withholding Schedules 2005 (2004 Budget Changes)
Holiday pay, long service leave and eligHoliday pay, long service leave and eligible termination payments
Start here
Get a plain-English read of Holiday pay, long service leave and elig
Turn the raw legal text into a practical explanation grounded in Taxation Administration Act 1953 - Withholding Schedules 2005 (2004 Budget Changes).
Holiday pay, long service leave and eligible termination payments
Payees who continue working
For withholding purposes, holiday pay (including any leave loading) and long service leave payments must be included as part of normal earnings except when they are paid on termination of employment. Payment for leave loading is subject to withholding if it exceeds the current threshold of $320. Only that part of the payment which exceeds this threshold should be subject to withholding, unless the payee asks the payer to withhold from the full amount.
Image unavailable in extracted text Refer to PAYG withholding – calculation sheet – Index No 6209 – holiday and long service leave payments for continuing employment.
Payees who cease working
Lump sum payments made when a payee ceases working are subject to a different rate of withholding. If a payee has unused annual leave, leave loading or long service leave, and they are resigning, see PAYG withholding – unused leave payments on termination of employment tax table (NAT 3351).
If they are leaving for other reasons the payments made may be eligible termination payments. Refer to PAYG withholding – eligible termination payment tax table (NAT 3349).
Do not withhold any amount for HECS, HELP or SFSS debts from lump sum termination payments.