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AU PAY: Tax treatment of the unused annual leave payout on termination of working holiday maker
Recent testing of the Unused annual leave termination payout for a Working Holiday Maker employee with termination reason being resignation, system (Oracle Payroll 12i) has taxed the annual leave payout at the WHM rates and not at marginal rates. Please note, working holiday makers are employed on a fixed term contract which entitles to pay any unused annual leave on termination.
And I couldn't find any information in the ato website.
Should this payout be taxed at marginal rates or WHM rates?
Example: When paying $5000 in annual leave payout on resignation, Termination leave deduction is $1850 (taxed at 37% as YTD salary is in between $87,001–$180,000)