Forum Discussion

yoshu's avatar
yoshu
Trusted User
1 year ago

Termination Pay Tax Withheld

Hi,

 

I am doing a final pay for one employee. I calculated the tax as per ATO guidelines. But the tax witheld amount i calculated is more than three times the tax MYOB is suggesting. Is this correct?

He has 41.783 hours unused annual leave calculated at $25 per hour. which is gross $1227.38. On Myob the tax for this is $104. But my calculation shows $364 tax amount!!! which is way too high.

His normal gross pay is $1900 and normal tax on that is $254. can anyone do the calculations for me and reassure me before I process his final pay?

Thank you

1 Reply

  • Isaiah_C's avatar
    Isaiah_C
    MYOB Moderator
    1 year ago

    Hi yoshu,

     

    That sounds like a tricky situation! Tax calculations on termination pays can sometimes be complex, especially with unused leave included. That said, since tax calculations need to be accurate, it might be best to check with your accountant or the ATO directly to ensure you're withholding the correct amount before processing the payment.

     

    Hopefully, someone in the community with tax expertise can help clarify things for you.

     

    Regards,

    Sai 

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