The ATO's termination payment table
| Payment on termination | Super guarantee? |
|---|---|
| Pay in lieu of notice (any termination reason) | Yes |
| Unused annual leave, leave loading and long service leave | No |
| Unused personal (sick and carer's) leave | No |
| Unused RDOs and time off in lieu | No |
| Redundancy pay (genuine or not), severance pay, gratuities | No |
Wages for the final days actually worked are ordinary earnings and attract super in the usual way. The leave rows apply regardless of the reason for termination and regardless of how the leave is taxed.
Is super paid on unused annual leave?
No. When unused annual leave is paid out on termination, neither the leave nor the leave loading on it is qualifying earnings, so the employer pays no super guarantee on it. That is true whether you resigned, were dismissed or were made redundant, and whether the leave is taxed at 32% (genuine redundancy) or at your marginal rate. The same goes for unused long service leave.
Is super paid on termination payments?
Only on one: pay in lieu of notice. Everything else in a typical termination package (redundancy pay, severance, ex gratia top-ups, and unused annual leave and long service leave) is outside qualifying earnings. Wages for days you actually worked before leaving attract super as normal.
Why pay in lieu of notice is different
The pattern in the ATO's table is consistent: pay in lieu of notice replaces wages you would have earned by working the notice period, and it attracts super like those wages would have. Redundancy pay and unused leave payouts do not, whatever the reason for termination.
Worked example
A 48-year-old on $2,000 a week is made redundant after 12 years, with 6 weeks of annual leave banked. The employer pays out the notice period.
| Item | Amount | Super at 12% |
|---|---|---|
| Pay in lieu of notice (5 weeks) | $10,000 | $1,200 |
| NES redundancy pay (12 weeks) | $24,000 | $0 |
| Unused annual leave (6 weeks, before loading) | $12,000 | $0 |
Of $46,000 in termination payments, only the $10,000 of notice attracts super: $1,200. At 12 years the NES redundancy weeks have stepped down to 12; notice is 5 weeks because this person has more than 5 years' service and is over 45.
Can I put my redundancy payment into super?
Not by rolling it over: the ATO is explicit that an employment termination payment can't be rolled over into super. It is paid to you, after tax. What you can do is make a personal contribution from the money once it is in your bank account, within the normal contribution caps for 2026–27:
| Type of contribution | 2026–27 cap | How it works |
|---|---|---|
| Non-concessional (no tax deduction claimed) | $130,000 a year | Under 75 with a total super balance below $1,840,000, you can bring forward up to 3 years: $390,000. |
| Concessional (you claim a tax deduction) | $32,500 a year, including your employer's super | Unused cap from up to 5 previous years can be added if your total super balance was under $500,000 on 30 June last year. |
A personal contribution is non-concessional unless you claim a tax deduction for it. To claim one you must give your fund a notice of intent in the approved form and get its acknowledgment before you lodge your tax return. Deductible contributions are taxed in the fund and count toward the concessional cap with your employer's super.
Two things to check first. A large taxable ETP raises your income for the year, and the ATO notes it can bring Division 293 tax (the extra tax on super contributions for high-income earners) into play for that one year. And contributing is a personal decision that depends on your age, balance and other income. This page explains the rules; it isn't advice about whether to do it, which is a question for a licensed financial adviser.
Two timing rules worth knowing
- ETPs and the 12-month rule. A payment generally has to be made within 12 months of termination to be taxed as an employment termination payment; paid later, it is taxed at marginal rates. The rule doesn't apply to the taxable part of a genuine redundancy or early retirement scheme payment.
- No rollover. An ETP can't be rolled over into super. It is paid to you, after withholding, as part of the final pay.
Frequently asked questions
Is super paid on redundancy pay?
No. Genuine redundancy payments (including any part above the tax-free limit), non-genuine redundancy payments, severance pay and gratuities are not qualifying earnings, so no super guarantee is payable on them.
Is super paid on pay in lieu of notice?
Yes, for every kind of termination. Pay in lieu of notice is qualifying earnings, so 12% super guarantee applies.
Is super paid on unused long service leave?
No. Unused long service leave paid out on termination is not qualifying earnings, the same as unused annual leave, whatever the reason the job ended.
Is super paid on unused sick leave?
Unused personal (sick and carer's) leave is not paid out on termination under the NES at all. Where an award or contract does pay it out, it is not qualifying earnings, so no super is due on it.
What changed on 1 July 2026?
Payday Super started. Super guarantee is now calculated as 12% of "qualifying earnings" each pay period. The ATO says what counts as ordinary time earnings didn't change, and the termination-payment answers are the same as before.
Related
- Notice periods and pay in lieu
- Unused annual leave on termination
- Paying redundancy: an employer checklist
- When your employer goes broke — unpaid super and the FEG
Sources
Figures on this page come from the following primary sources. The date is when we last checked the page against the source.
- What payments are qualifying earnings (ATO), checked 24 September 2026.
- Employment termination payments for employees (ATO), checked 24 September 2026.
- The 12-month rule (ETPs) (ATO), checked 24 September 2026.
- Non-concessional contributions cap (ATO), checked 5 October 2026.
- Concessional contributions cap (ATO), checked 5 October 2026.
- Personal super contributions (ATO), checked 5 October 2026.
- Division 293 tax on concessional contributions by high-income earners (ATO), checked 5 October 2026.
- Notice and ending employment (dismissal) (Fair Work Ombudsman), checked 24 September 2026.
- Redundancy pay and entitlements (Fair Work Ombudsman), checked 7 August 2026.
Independent guide — not a government service, and not financial, legal or tax advice.