Leave Payout Tax Basics
What to consider when estimating tax on annual leave or other leave payouts.
Payment type matters
Annual leave, long service leave and termination-related payments can have different rules.
Withholding can look unusual
A payout can make one payslip look very different from ordinary salary, especially near termination.
Use estimates carefully
For simple annual income planning, add the expected payout to annual income. For termination specifics, get payroll or tax advice.
Common questions
Is unused annual leave taxed?
It can be subject to withholding and tax treatment depending on the circumstances.
Can a salary calculator handle every termination payment?
No. Termination payments can be specialised and need separate treatment.