The calculation of the PAYG withholding for an employee taking annual leave depends on the method by which the employees choose to be paid whilst on leave.
When the employee chooses to be paid each week while on leave, the PAYG withholding and other deductions are calculated as detailed below.
In this example the employee is being paid for a regular working week plus leave loading.
|One weeks annual leave||
|Leave loading||800.00 x 17.5%||
Below is a summary table:
|Leave Loading||800.00 x 17.5%||140.00|
|Net taxable leave loading||140.00 – 80.00
|Taxable holiday pay||860.00|
|Tax on taxable holiday pay||153.00|
|Gross holiday pay||800.00 + 140.00||940.00|
|Net Holiday Pay||940.00 – 153.00||787.00|
|Pay Slip Information|
|Gross Pay||Tax||Net Pay|
Note: All other deductions will be deducted from the employees pay as usual, ie health fund deduction, union fees etc.
Once the calculation is complete you should record the figures in the general journal and cash payments journal as shown below.
|Holiday Leave Accrual||
|Wages for the week ending xx/xx/xx|
|Superannuation calculation on normal earnings.|
Note: Leave loading is exempt from Superannuation Guarantee Contributions (SGC). For further detail see the Superannuation Guarantee Ruling SGR94/4 and SGR 94/5. law.ato.gov.au