Guide
Leave Payout Tax Basics
What to check when estimating tax on annual leave, leave loading or a final leave payout in Australia.
Plain-English answer
Helpful before using the calculator
Updated 2026-07-11
What this page helps you answer
What this pay, tax or salary topic means in simple terms.
What number or setting to check next in the calculator.
Split the payout before you estimate it
Start by separating ordinary salary, unused annual leave, long service leave, leave loading and any other termination amounts. Mixing everything into one number makes the estimate much less useful.
Withholding on one payslip can look harsh
A leave payout can make a single payslip look heavily taxed, especially near resignation or termination. That is a payroll withholding issue on the day, not always the same as the final annual tax outcome.
Use a year-end check as well
After you estimate the payout itself, compare the full-year position using the tax return calculator. That helps you see whether the withholding may lead to a refund, a bill or a roughly even result.
Common questions
Is unused annual leave taxed in Australia?
It can be subject to withholding and tax treatment depending on the circumstances, the type of payment and why it is being paid out.
Why does a leave payout look overtaxed?
Payroll withholding on one large final pay run can look high. The full-year tax result can still be different once all income and deductions are reconciled.