• Genuine redundancy, invalidity or an early retirement scheme

    A genuine redundancy, invalidity or an early retirement scheme means both the following apply:

    • The termination time is before the time that retirement or termination would ordinarily have occurred (and in any event before the employee turns 65), and
    • You have not been party to any agreement to employ the person later.

    See Definitions for more information

    Withholding rate

    Use Table 1 to work out withholding rates for payments for unused annual leave and leave loading.

    Table 1: Withholding rates

    Payment type

    Withholding rate

    Annual leave

    32% of the total amount, disregarding any cents

    Leave loading

    32% of the total amount, disregarding any cents

    Example 1: Leaving employment because of invalidity.

    Greg is retiring early because of invalidity.

    Greg is to be paid a lump sum of $2,260 for unused annual leave and $420 leave loading. Total amount subject to withholding is $2,680.

    Amount withheld:
    $2,680 x 32% = $857 (disregarding cents)

    End of example

    Completing payment summaries for unused annual leave

    This information applies if you make a payment to an employee for unused annual leave on termination of employment because:

    • of genuine redundancy
    • of invalidity
    • they have accepted an offer under an early retirement scheme.

    The total amount of the payment (unused annual leave and leave loading, if applicable) is shown at 'Lump Sum A'. The amount withheld from the payment is included with any other withheld amounts at 'Total tax withheld'.

      Last modified: 23 Sep 2014QC 19081