Queensland currently taxes payments made to employees as a consequence of the termination of their employment in addition to the ordinary wages of those employees. All termination payments whenever paid in relation to a termination are liable.

From 1 July 2008, termination payments to non-employee directors, and death benefit payments for employees and non-employee directors will also be taxable. This, and the introduction of relevant contracts provisions, means that from 1 July 2008 taxable termination payments will include:

1. any unused annual leave;
2. any unused long service leave;
3. so much of an employment termination payment (“ETP”) that would be included in the assessable income of that employee if the whole of the ETP had been paid to the employee (now includes a death benefit ETP);
4. any amount similar to point 3 above paid as a consequence of the termination of a director;
5. any amount similar to point 3 above paid as a consequence of the termination of a person paid under a relevant contract; and
6. any payments similar to those listed to 1 – 5 above that are received by a person in consequence of termination of another person’s employment (under a relevant contract or otherwise) or termination of another person’s directorship.

For further details, see our information sheets and select 8 - Other wage changes.