Question:

 

At the moment AL Annual leave has been processed at the current rate and car allowance is paid as a flat Annual rate, evened out each month and paid with this as an allowance.

 

The GESA amount is set up to have all gross earnings, including the non tax car allowance.

 

My client pays over and above on termination payments and wish to include the Car Allowance in this.

 

My problem is when paying the term pay and leave has been taken to reduce the pro rata 8% payment, should the car allowance also be used the leave taken calculation only?

 

Answer:

 

On termination the calculation for 8% is gross earnings  from the last entitlement date to term date or start date to term date (if worked less than 12 months).  The car allowance should not be part of the gross earnings for that period if non taxable and should not be used to reduce the 8% value.  If they do this then they are not meeting the requirements of the Act.