Free tool

Annual Leave Payout Tax

ANNUAL LEAVE PAYOUT — TAX TREATMENT

When you leave a job, your unused annual leave is paid out as a lump sum. How it's taxed depends on WHY you're leaving. Resignation/dismissal = marginal rate. Genuine redundancy = concessional 32% rate (often a much better outcome).

Annual salary ($)

Unused annual leave (days)

Reason for leaving

Apply 17.5% annual leave loading (most modern-award permanent employees — check your award)

Your AL payout tax breakdown

Daily rate ($85,000/yr ÷ 260)$327/day

Gross leave (20 days × $327)$6,538

+ 17.5% leave loading+$1,144

Gross payout$7,683

Tax (32.0% effective rate)−$2,458

Net payout (after tax)$5,224

Tax treatment

Resignation / standard termination — AL payout added to your taxable income and taxed at your marginal rate. Often pushes you into a higher bracket for that financial year.