Forum Discussion

Experienced Cover User

3 years ago

Unused Annual Leave on employee resignation

Hello MYOB Community, Our organisation is seeking advice on Unused Annual Leave when an employee resigns. The payroll category for this is set-up as a Wages Item in MYOB AR. Originally, this payro...

Tracey_H
3 years ago
Hi rosem

As we're not accountants or tax advisors we're not permitted to advise on what amounts need to be included in super guarantee calculations. If you're not sure you do need do check with the ATO.

Please let me know if you need further help.

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

Tracey_H

Former Staff

3 years ago

Hi rosem

Thanks for your post. Gross wages are taxed as if they were all earned in that pay period. If the pay includes termination items PAYG should be manually calculated and adjusted as per the ATO calculations.

For super not calculating on unused leave, go to Payroll Categories>>Superannuation>>open the Super guarantee>>click on Exempt and make sure the Unused leave category hasn't been ticked as this will exclude it from super calculations.

Please let me know if you need further help.

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

rosem
Experienced Cover User
3 years ago
Thank you, Tracey,
I have been going round and round searching online to find answers, and this subject has so many contradictions.
The ATO declare that the Superannuation Guarantee does not apply to Termination payments of Unused Annual Leave, however Annual Leave Loading does:-
https://www.ato.gov.au/Business/Super-for-employers/Paying-super-contributions/How-much-super-to-pay/List-of-payments-that-are-ordinary-time-earnings/
This is a contradiction to Annual Leave as Ordinary Time Earnings, which is categorised as gross wages and does attract the Superannuation Guarantee.
If you are able to clarify this that would be great 😊
My thoughts are that Unused Annual Leave should attract the Superannuation Guarantee, unless it is a lum sum payment when an employee is terminated due to an ETP genuine redundancy, in lieu of notice, a gratuity or 'golden handshake'etc.
Thanks again,

rose
- Tracey_H
  Former Staff
  3 years ago
  Hi rosem
  
  As we're not accountants or tax advisors we're not permitted to advise on what amounts need to be included in super guarantee calculations. If you're not sure you do need do check with the ATO.
  
  Please let me know if you need further help.
  
  If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.
  - rosem
    Experienced Cover User
    3 years ago
    Thanks Tracey,
    Yes, I am checking with our accountants and the ATO.
    Your solution is great, and I forgot to check the exceptions ! DUH
- Opal
  Cover User
  3 years ago
  I'm just wondering if you got the answers for the Superannuation Guarantee on Termination? I was also trying to find out if Superannuation is paid on Unused annual leave and long service leave?
  - Tracey_H
    Former Staff
    3 years ago
    Hi Opal
    
    This link to the ATO website, List of payments that are OTE, has information regarding super on termination payments. However, if you're not sure I would recommend checking with the ATO or your accountant.
    
    Please let me know if you need further help.