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  • Leaving your job

    Work out which type of payment you'll receive when leaving your job and the tax you'll pay on unused entitlements.

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    Reasons for leaving your job

    You may leave your job as the result of termination or redundancy. In these circumstances, payments you receive are:

    • Employment termination payments (ETP) – a payment made as the result of termination that includes amounts for some unused entitlements like sick leave or rostered days off, payments in lieu of notice or a gratuity or a 'golden handshake'.
    • Redundancy payments – a genuine or non-genuine redundancy payment is a type of ETP that you receive for a specific reason.
    • Payments for accrued leave.

    Tax on unused entitlements when you leave a job

    The tax you pay on unused leave, termination of employment or redundancy payments may be different to the tax you pay on your normal income. The tax you pay depends on both:

    • the reason for leaving the job
    • any unused entitlements you may have accrued, such as long service leave or sick leave.

    If you receive any lump sum payments from your employer for unused annual leave or long service leave, you may pay tax at a lower rate than your other income. These lump sum payments will appear at either 'Lump sum A' or 'Lump sum B' on your income statement or payment summary.

    Last modified: 15 Jun 2023QC 27125