This summary is incorrect because it reflects his long service leave payment without dividing it first by 20 to determine the 5% of the amount that is taxable (ATO). By not deducting this amount Dan will be forced to pay more taxes on his long service leave payment than he was supposed to (5%). In order to fix this he should have the summary remedied by his employer to reflect 5%, not the total amount (ATO).
Her gross income of all her pay is $82,406. However she will only pay 5% of her long service leave and unpaid vacation time. Her part B when the long service leave and vacation pay are added together then divided by 20 equal $957.
This same process also applies to Bill’s case. First to find his gross pay, one must add up his salary as well as his holiday pay and unused redundancy pay. His gross total would be $93,613. Redundancy pay is tax free since it signals the abolishment of a job by the employer (ATO) . Therefore for his lump sum he will only pay 5% on his holiday pay. His total holiday pay sum would end up being $193.
She will not be receiving a superannuation tax stream this year because she has now reached the age of 60 which is the preservation age (ATO). The untaxed portion is included in her assessable income and has a small tax rate. Usually the rate for those at the age of 60 or over is around 15%.
Works Cited:
ATO. "PAYG summaries." ATO. www.ato.gov.au/content/16023.htm (accessed May 13, 2013).
ATO. "Super Payout Tax." Australian Taxation Office Homepage. http://www.ato.gov.au/individuals/PrintFriendly.aspx?ms=individuals&doc=/content/86252.htm (accessed May 13, 2013).
ATO."Taxation and termination ." ATO. www.ato.gov.au/individuals/content.aspx?menuid=0&doc=/content/00325608.htm&page=10&H10 (accessed May 13, 2013).
