Long Service Leave payment

Miks88
Miks88 Member Posts: 30 Reckoner Reckoner
in Accounts Hosted

Good afternoon all,

I would like to request for your assistance in paying out the Long service leave to an employee resigned. I got the following, and the employee has not availed any LSL during his time with the company. I have calculated the LSL using the WA LSL calculated and go the amount as follows:

image.png

I was following the below calculation steps from ATO website but I am not getting the amount

image.png

I don't know if I am doing right. Please help me with this. Thank you very much for your support.

Answers

  • Acctd4
    Acctd4 Accredited Partner Posts: 4,099 Reckon Accounts Hosted Elite Expert Reckon Accounts Hosted Expert
    edited September 3

    @Miks88 Your ATO screenshot is just on how to calculate the PAYG Tax amount to be withheld from it, not for the LSL calculation itself.

    Is LSL already set up & being tracked in the program ?

    If not, you will need to use one of your Other Leave tabs, rename it to LSL & manually add the 346.8 hours to the Available Hours as of … box:

    image.png

    You also need additional Payroll Items set up for both AL Paid out on Termination & LSL Paid out on Termination. This is because there are separate STP Tax Tracking Types for when leave is paid out (eg on Terminations v Cash outs v Redundancy/Invalidity/Early Retirement Scheme)

    You also need to determine how it's categorised based on the employee age & length of service. Most ordinary scenarios will just be part of standard unused Leave however if the LSL is accrued from an extensive length of service, it may be a Lump Sum A (pre-17/08/93) or Lump Sum B (pre-15/08/78)

    If you are unfamiliar with many aspects of the program/payroll etc, I would strongly recommend reaching out to me direct, to arrange 1-on-1 customised training/assistance, as these are important areas that need to be configured correctly.

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! *** Bookkeeping & 1-on-1 customised software Training/Troubleshooting ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    shaz@accounted4.com.au

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • Miks88
    Miks88 Member Posts: 30 Reckoner Reckoner

    Thank you very much Shaz.

  • Miks88
    Miks88 Member Posts: 30 Reckoner Reckoner

    Hi Shaz,

    Could you please advice me of the tax code for the Long Service Leave? I need to pay this tomorrow. This will be separate payment, and I need to process in Reckon and not with the wages. We are based in Perth. And the employee resigning LSL calculated from the year 2015 to 2025, and he has not taken any leave. Your guidance in this regards will be very much appreciated. Thank you.

    image.png
  • Kris_Williams
    Kris_Williams Member Posts: 4,173 Reckon Hall of Famer Reckon Hall of Famer

    Are you processing this via payroll, no tax code, not entered as a cheque

  • Miks88
    Miks88 Member Posts: 30 Reckoner Reckoner

    No Kris. I am not processing via payroll. I need to pay him tomorrow. Trying to set up the account head to book his LSL. Please guide me of the process. Thank you.

  • Kris_Williams
    Kris_Williams Member Posts: 4,173 Reckon Hall of Famer Reckon Hall of Famer
    edited September 4

    you need to do it in payroll, I guess if you’re positive of the amount you could use a cheque but you will have to go back and do it in payroll and then delete the cheque. Not advisable though

  • Kris_Williams
    Kris_Williams Member Posts: 4,173 Reckon Hall of Famer Reckon Hall of Famer

    Have you been using payroll up till now? All you have to do is setup the LSL payroll item in his details as per Shaz’s advice above and enter the amount outstanding - check everything with your calculations and if you’re sure of the tax component you can override what payroll says.

    Take Shaz’s advice and follow her instructions

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