Withholding from unused leave payments on termination of employment

Work out the amount to withhold from payments of unused annual and unused long service leave when an employee leaves.

Last updated 1 May 2020

Payments when no tax file number (TFN) is quoted

Special rules for withholding apply to payments made to an employee who has not given you a valid TFN, where you withhold tax at a higher rate.

You do not withhold tax from unused leave payments made after the death of an employee and you do not show these payments on their payment summary.

You need to withhold tax from payments of unused annual leave on termination of employment.

You need to withhold tax from payments of unused long service leave on termination of employment.

This section explains commonly used terms.

QC19081