Leave Payout Tax Basics

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.

Before you make a decision

Use the guide to understand the topic, then check the number with your own inputs. If the result affects a resignation, job offer, visa decision, redundancy, tax return or family budget, confirm the details with the right official source or adviser.

Common questions