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Allowances leave and other payments

Withholding for allowances, leave and other payments.

Published 16 June 2024

Allowances

Generally, allowances are added to normal earnings and the amount to withhold is calculated on the total amount of earnings and allowances.

For more information on when to withhold and report on allowances, refer to Withholding for allowances.

Leave loading

If you pay leave loading as a lump sum, use Schedule 5 – Tax table for back payments, commissions, bonuses and similar payments to calculate withholding.

If you pay leave loading on a pro-rata basis, add the leave loading payment to earnings for that period to calculate withholding.

Holiday pay, long service leave and employment termination payments

Employees who continue working for you

You must include holiday pay (including any leave loading) and long service leave payments as part of normal earnings, except when they are paid on termination of employment.

For more information, see Withholding from leave payments for continuing employees.

Employees who stop working for you

This schedule doesn't cover any lump sum payments made to an employee who stops working for you.

If an employee has unused annual leave, leave loading or long service leave, refer to Schedule 7 – Tax table for unused leave payments on termination of employment.

Any other lump sum payments may be employment termination payments, refer to Schedule 11 – Tax table for employment termination payments.

Don't withhold any amount for study and training support loans debt from lump sum termination payments.

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