Should I Jump Ship Now and Cash out LSL? or Just Take LSL before Changing Jobs?

Ultimate Gattai on 12/09/2023 - 12:49
Last edited 13/09/2023 - 23:48

I've got 5 weeks holiday after this week, but I'm really tired of my current job of 14 years and want to leave. I see there is a job or two in my area I could probably get if I go for it. But I also have another 4 weeks of holidays and 12 weeks of LSL saved up. Is it crazy if I just grit my teeth working for another 2.5 months after holidays and then use up my 12 weeks LSL before leaving for another job (I plan to use use the last month or two of LSL to go for jobs)? Alternately I could just cash out the 4 weeks AL and 12 weeks LSL, then dump most of it into Super as an after tax contribution to get most of it back at tax time.

Another issue is that Full-time jobs come up sparingly in my area and I can't really change positions or roster at my job (I've tried/asked, I just get stuck where I am), I also live in QLD as I know the laws around LSL vary by state.

EDIT: I work retail and the job I'm looking at is a traineeship in Finance, it's been vacant for a month plus looking at the initial notice date (they get removed as the positions are filled). The LSL also won't be transferable as it will be different industries, but it'll be good to get out of retail.

Poll Options

  • 17
    Change now and possibly get a job, pay out AL/LSL
  • 18
    Use some of your LSL before trying to find a new job
Education & Work

Comments

  • Downvoter on 12/09/2023 - 12:52

    LSL won’t transfer across to new role?

    • Nugs on 12/09/2023 - 12:55
      +1

      Whilst not specified, I'd guess op is planning to move companies
      .

    • Ultimate Gattai on 12/09/2023 - 13:06

      It will be different industries, so probably won't be transferable.

  • Cherry12 on 12/09/2023 - 13:12
    +3

    Get a new job, change companies. Your job will have to pay you any unused leave either AL or LSL when you leave.

  • Trance N Dance on 12/09/2023 - 13:17
    +7

    Use your LSL, you accrue annual leave whilst on LSL. Whereas if you cash out your LSL you lose the opportunity to accrue.

    There's also nothing stopping you from using your LSL at company A whilst working at company B. You'll just be considered to have 2 incomes for that duration and claim tax free threshold accordingly.

    • pjetson on 12/09/2023 - 14:17

      There's also nothing stopping you from using your LSL at company A whilst working at company B

      Perhaps not in QLD, but there certainly is in Northern Territory, South Australia and Victoria.

      • Trance N Dance on 12/09/2023 - 17:57

        Yes, you're right. Forgot to mention for QLD it would be based on contract conditions and whether there's any conflict of interests. At the very least the LSL time could be used to look for another job.

        Main point is use it so you will accrue additional annual leave and forgot to mention super.

  • Tovers93 on 12/09/2023 - 13:46
    +6

    To get the most out of your AL/LSL you should use it in your current role. That way you accrue additional leave while taking it plus it gets super paid on-top. Super is not paid on AL/LSL cashouts upon end of employment.
    Also beware that a cashout of 16 weeks leave (31% of your annual salary) will be taxed at your top tax rate. E.g. if it puts you over $120k then it's 37%, > $180k = 45%
    So by using your 16 weeks of leave entitlement, you'd accrue ~ 1 more week of AL plus earn an additional 11% of the value in super.
    You may also qualify for end of calendar year bonus…

    TLDR - use the leave, apply for new job while on leave (unless new job won't exist by then).

    • ESEMCE on 12/09/2023 - 15:17

      Great advice!!!

    • BlipBlipBoo on 12/09/2023 - 15:44

      Yep good advice, Super is not paid on cash out, definitely take the LSL for the extra Super $$$

    • localhost on 12/09/2023 - 15:48

      Or… get $30-40k even taxed hard. You can put them into your super as well. What you should do staying at home for 2 months?

    • Ultimate Gattai on 12/09/2023 - 22:57

      It'll add $16,000 on top of my annual wage if it's 31%, I work retail, so it's only $66,000 for year atm (there is one job I'm looking at but I don't know what it pays, I assume it pays more). I strongly doubt the job I'm looking at will exist by the time I take it, although maybe some other opportunity might come up in the mean time.

    • Ultimate Gattai on 12/09/2023 - 23:01

      Can you do that In Queensland? And won't I still pay around the same tax if I take another Job in the end? The only difference is I get Super on top of the LSL.

      • Trance N Dance on 13/09/2023 - 01:11

        The issue is if you get paid out a lump sum and immediately start a new job your total income for the tax year will be higher and potentially bump you into the next tax bracket. If you take out your LSL but don't work for the period of your LSL then effectively you won't pay any more tax as you won't have increased your income for the year since you'll still be earning your normal rate.

        • Ultimate Gattai on 14/09/2023 - 00:01

          That's how I thought it would go, I'm already in the 32.5% tax bracket (about $5k into it), I could mitigate some of tax by dumping into Super as an after tax contribution if I take the lump sum, though I'll probably still pay more tax in the end.

  • mskeggs on 12/09/2023 - 14:01
    +1

    No super paid on LSL cash out is the biggest disincentive to cashing out, plus added taxable income. If you are feeling a bit over it all, take the break - you might come back feeling better.

  • Drakesy on 12/09/2023 - 14:39
    +1

    Use it as leave, tax will take a shit tonne and you'll have to start again.

    If there's advice that i'll always take on it's that holidays are meant to be taken else your entire life is spent slaving away and not enjoying yourself.

    • Ultimate Gattai on 12/09/2023 - 22:58

      I'd prefer the time off, but I worry if any full-time jobs will be available when I do take the LSL.

      • Drakesy on 12/09/2023 - 23:09

        There'll always be another job. But there wont always be another time to go on holidays with your misso/without/with kids

        One of the biggest regrets that pensioners have is not holidaying more

        • Ultimate Gattai on 13/09/2023 - 23:58

          I'd like to use the time off to enjoy/learn things I normally can't because my work week drains me, it would be nice to spend time with my sister who's recently had a baby and focus on some of my hobbies.

  • Trying2SaveABuck on 12/09/2023 - 15:56

    i dont get paid super if you dont take it - so your essentially 11 percent better off if you take it and quit before returning

  • HD123456789 on 13/09/2023 - 07:11
    -1

    It sounded like you are absolutely loath your job, I would take my AL and LSL asap then look for another job during the break because doing something that you hate day in day out will cause so much stress and anxiety, look after your mental health first. Good luck.

    • Ultimate Gattai on 13/09/2023 - 23:55

      I didn't always loath it, I actually like the type of work, it's just that I hate the way the company is run in the last few years and the hours I'm stuck with. We've lost 10 people in a 2 month period earlier in the year (quite a few very experienced people who have been there a long time) and I think we recently lost some more staff because I see other co-workers doing their roles, but haven't seen the people that would normally do them recently.

      If I could change roles/rostered hours in the company, I would be happier even with how badly it's running, but there isn't much reason to stay otherwise.

  • JIMB0 on 13/09/2023 - 07:57
    +1

    I worked with a bloke who took several months off using all his annual leave and long service leave. He came back for less than a week, did absolutely nothing then walked in the office to give the boss a serve and walked out. Well played I thought.

    • Master Bates on 15/09/2023 - 09:22

      Legend. That would have felt awesome!

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