Author Topic: Employer super payable on termination leave payouts on retirement  (Read 3529 times)

happy

  • Walrus Stache
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I am currently on LSL and will resign at the end of this to retire. I was checking my leave balance and will still have about another 2.5 months of leave on full pay at the end of this current leave ( finishes towards the end of April). I was planning to just take this as a lump sum on retirement, since the majority of the leave  would still fall in the 2019FY even if I took it as leave. Hence no tax advantage either way.

However researching how to make sure I got all my concessional super payments up to the cap for 2019, I read that if I take the leave entitlements as a termination payout, my employer does not pay me the 9.5% super.  About 3.7k in my case.

This was news to me. I've applied to take the leave, which may or may not be approved.

Can any clever finance/accounting people confirm I've understood the super implications correctly?

mjr

  • Bristles
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Re: Employer super payable on termination leave payouts on retirement
« Reply #1 on: February 20, 2019, 04:59:11 PM »
That's correct.  You will forego SGC payments from your employer.

happy

  • Walrus Stache
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Re: Employer super payable on termination leave payouts on retirement
« Reply #2 on: February 20, 2019, 05:39:04 PM »
Thanks mjr.
I'm fairly confident the annual leave will be approved.  The LSL is more discretionary, so fingers crossed.

Luckyvik

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Re: Employer super payable on termination leave payouts on retirement
« Reply #3 on: February 20, 2019, 11:45:05 PM »
Yep, unpaid lsl at termination is not considered 'ordinary Time earnings' ie no super, see:
https://www.ato.gov.au/Business/Super-for-employers/How-much-to-pay/Checklist--salary-or-wages-and-ordinary-time-earnings/#leave

happy

  • Walrus Stache
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Re: Employer super payable on termination leave payouts on retirement
« Reply #4 on: February 21, 2019, 01:53:06 AM »
Thanks for the link Luckyvik