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:
- Annual Leave
- Leave Loading
- Long Service Leave
- Personal Leave
- Rostered Day Off (RDO)
Cash out leave should not be paid after termination, instead use the Unused Leave on Termination to record the amount paid
Yes, cash out leave payments are ordinary time earnings.
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).
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
- Access the Other Payments from the application menu
- Click and select one of the available leave types
- The cash out leave window appears
- Select the required employee
- Select the leave type to cash out
- Enter the total paid hours and hourly rate
- Select Yes if leave loading is applied
- If you want to withhold more or reduce the tax withheld, enter the Additional Tax amount
- If there is a voluntary salary sacrifice super, enter the salary sacrifice amount
- Enter the payment date
- Click Save
Depends on the selected leave type and the employee, the available leave hours should be displayed, paid hours can not be more than the available hours.
Cash out leave should be paid using the employees base rate.