Payments - Cash Out of Leave in Service

Cash out of leave in service represents the amount of ordinary time earnings leave entitlements that have been paid out in lieu of the payee taking the absence from work. This option represents Fair Work entitlements as defined in an award, enterprise agreement or contract of employment (for award and agreement free employees).

When leave is cashed out, it reduces the balance of the entitlement, as occurs if the absence was taken, but on the date of payment rather than over the duration of the absence.

Cash out of leave in service may include, but is not limited to, the following types of leave:

Cash out leave should not be paid after termination, instead use the Unused Leave on Termination to record the amount paid

Do I have to pay super on cash out leave payments?

Yes, cash out leave payments are ordinary time earnings.

Can I salary sacrifice super out of cash out leave payments?

Yes, the sacrifice is considered as Voluntary which means it has to be reported under the Employee's Salary Sacrifice and the Employer Reportable Super Contribution (RESC).

How do cash out leave payments get taxed?

Cash out leave payments are taxed as per NAT 3348 Tax table for back payments, commissions, bonuses and similar payments - Method B(ii)

Adding Cash Out Leave Payment