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How to treat leave payouts in your super

What is a leave payout?

If an employee receives a payment for any unused annual or holiday leave, then this is referred to as a leave payout. It can occur while a staff member is still employed or when they leave your company.

Is superannuation paid on unused annual leave?

Under current legislation, normal employee leave qualifies for super as does annual leave that is cashed out during the normal course of employment.

Annual leave that is cashed out on termination with notice does not get included when you are working out super under the current legislation – but your workplace policy may allow for these payments to be included when working out super.

In short, it depends on the type of leave and whether it’s part of regular income or a termination payment, and you should check any workplace policies and EBAs you have in place alongside the legislation.

What types of leave are included in super?

Note: The following information can be accessed from Australian Taxation Office (ATO) website and is for general guidance only. You should always check with the ATO for latest tax information on annual leave and super.

Type of leave Normal On termination
Annual leave Yes No
Sick leave Yes No
Parental leave e.g. maternity, paternity, adoption No No
Ancillary leave e.g. jury duty, defence force reserves No No

For information on termination payments in lieu of notice and more visit the Australian Taxation Office website at