I am thinking of changing jobs. I have 300hrs annual/long service. Will i pay more tax if i take a lump sum or am i better asking for time off with pay and then resign? Thank you

Hi Leesa,
As a PAYG employee you pay tax based on what you earn in total for the full financial year. If your payout qualifies as an eligible termination payout then the tax may be reduced.
If it was me, I’d find a new job first and then give notice. Then you can put the lump sum to good use and keep living off your new wage.
Best of luck
Scott

Lump sum payments of leave balances are taxed differently to normal wages. For example if you earn $1500/week and are paid weekly your PAYG W will be something like $350. if you take 300 hours EXTRA in one week, that would equate to an additional $10,000 in one week, and normal tax table calculations are based on you earning the SAME amount each week.
so you would end up paying around $5000 in PAYG W!!!

So, what happens is that your payroll department has to do a complicated calculation that takes into account your average earnings and applies a different (lower) rate of tax to this payment. Trust me it will still hurt like hell, but you wont be crying at tax time when you dont get a huge tax bill either.

And what Scott says about ETP's is right too. they are taxed differently again, but it needs to be a genuine redundancy.

Also bear in mind that depending on who your employer is and how big they are, you may have to discuss how the unused leave is paid out. There are many small businesses out there that would really struggle to take a $10,000 hit when an employee leaves, it may not be what you want, but sometimes the employer needs to pay the leave out over a period of time....

good luck
Brendan