Skip to content
English
Sign in
BusinessHub
  • There are no suggestions because the search field is empty.

Cashout Annual Leave

In MYOB Advanced you can process a cash out of leave however it is recommended that you refer to the governing bodies in each state

Purpose

Following is information to assist you with processing an Annual Leave – Cash out pay item in MYOB Advanced Payroll.

Disclaimer: This information about how to use MYOB Acumatica is of a generic nature and is based on information supplied by MYOB. Not to be relied on for legal, accounting or employment advice. Data in screenshots is fictional and any resemblance to real personal information is coincidental. BusinessHub makes no warranties in relation to and is not responsible for information contained in third party websites.

Before You Proceed

Check whether the cashing out of annual leave is permitted by law and, if so, on what terms.

Processing a Leave Payout

Review the Leave Balance of the Employee


It is recommended that you first confirm the employee has enough annual leave to be able to pay out as well as any minimum leave balance required by law.

  1. Navigate to and open the Employees Pay Detail screen (MPPP2310).
  2. Search for and select the employee and click the Entitlement Balances tab.
  3. Confirm there is enough annual leave for the employee to cash out.
    Employee balances
    Payroll > Employees > Pay Details (MPPP2310)

Review the GL Purpose Code for the Employee's Annual Leave Payment Entitlement

  1. Navigate to and open the Pay Items screen (MPPP2210).
  2. Select the relevant leave Entitlement pay item.
  3. Click the Additional Info tab and note down the General Ledger Purpose code.

    Payroll > Pay Item Configuration > Pay Items

Create an Annual Leave - Cash Out Pay Item

  1. Navigate to and open the Pay Items screen (MPPP2210).
  2. Click + to create a new Pay Item and enter:
    1. In the Description field, enter Annual Leave – Cash Out.
    2. In the Type field, select ENTITLEMENT PAYMENT
    3. In the taxation field, select Taxable:
      Extra Pay (Lump Sum - Full Year),
      OR
      Bonus / Commission Common Pay Group. 
    4. In the Calculation Method tab, select the following:

      1. In the Method field, select Rated.
      2. In the rate section, select Use Employee’s Rate.
    5. In the Additional Info Tab, select the following:

      1. Update the Visibility section as required.
      2. In the General Ledger Purpose field, enter the General Ledger purpose code identified above.
      3. Select the appropriate Leave Entitlement
      4. TICK the CASH OUT Check Box to the Right
      5. If Leave Loading is to be paid (Generally the case), tick the Leave Loading Pay Item Checkbox and select the appropriate Pay Item, 
        NOTE: This Pay Item can be a Cashout Leave Loading Pay Item setup for this specific purpose, or it can be the Normal Leave Loading Pay Item, depending on your reporting needs.
        Payroll > Pay Item Configuration > Pay Items (MPPP2210)

 

  1. Click Save.

Review and Update Pay Item Liabilities

  1. Navigate to and open the Pay Item Liabilities screen (MPPP1025)
  2. Select the Annual Leave Cash out Pay Item and review the setup for the following fields:
    1. Liable for Workcover
    2. Liable for Superannuation
    3. Liable for payroll Tax
    4. Payroll Tax Category
    5. ATO Category
      CashoutLLLiab

If the Employee is entitled to Leave Loading - You will need to add an allowance for Cashed Out Leave Loading as well

  1. Navigate to and open the Pay Items screen (MPPP2210).
  2. Click + to create a new Pay Item and enter:
    1. In the Description field, enter Annual Leave – Cash Out Leave Loading.
    2. In the Type field, select Income .
    3. In the taxation field, select Taxable: Bonus / Commission Common Pay Group.
    4. In the Calculation Method tab, select the following:
      1. In the Method field, select Percent of.
      2. In the Percentage section, enter 17.500.
      3. then select "Selected Pay Items (Summed)" in the of Field.
      4. Finally select the "Cashed Out Annual Leave"  Pay item.
        CashoutLL01
    5. In the Additional Info Tab, select the following:
      1. Update the Visibility section as required.
      2. In the General Ledger Purpose field, enter the General Ledger purpose code for Wages & Salaries, (Leave Loading is not part of the AL Provision so is not taken from the Provision)
        CashoutLL02

Create the Pay and add the Annual Leave - Cash Out Pay Item to the Employee's Pay

  1. Navigate to and open the Manage Pays screen (MPPP4110).
  2. Click the Ellipses menu and select Create Pay.
    The Pay Run appears in the grid with the Open status.
  3. Open the new pay run and click the employee's name.
    The Employee's Current Pay window opens.
  4. Click + in the Pay Items grid and:
    1. Select the Annual Leave – Cash Out pay item.
    2. In the quantity field for the pay item, enter the amount.
      Note: The calculated value should match the calculated Amount from the Entitlement Adjustment.
    3. Update the Derive Average Gross from: field as you require the calculation for tax
  5. If Leave Loading is applicable, again click + in the Pay Items grid and:
    1. Select the Leave Loading – Cash Out pay item.
    2. Note: The calculated value will be derived from the Value calculated on the Cashed Out Leave Item above.
    3. Update the Derive Average Gross from: field as you require the calculation for tax.
  6. Click Save.
  7. Complete the Pay Run as per your normal process.

Related Articles

Questions?

If you have more questions, please contact BusinessHub's support desk on 1300 733 071 or raise a Support Case.