Forum Discussion

finance12's avatar
finance12
Contributing User
10 hours ago

Tax on unused leave when normal gross pay is $0?

I am processing a final pay for an employee for a resignation termination and need to pay their unused annual leave

I am following this guide https://www.myob.com/au/support/myob-business/payroll/processing-a-final-pay and in step 12, it asks me to enter the employees normal gross pay, however in this financial year, the employees normal gross pay is $0 as they have been on leave without pay in this financial year

 

Will there still be tax required on unused leave?

 

Note: It does not let me go to the next step with a $0 in the normal gross section

Would I therefore,

  • input the normal gross from the previous financial year when they were working

I cannot calculate the tax on the lump sum payment of unused annual leave, due to it being a termination payment.

 

  • Earl_HD's avatar
    Earl_HD
    MYOB Moderator

    Hi finance12,

    The calculation of tax for a situation with zero gross pay and only a leave payout typically involves a more detailed process due to the specific tax rules regarding leave payments. With this issue, we recommend reaching out to an accountant for an accurate solution.

    Regards,
    Earl