STP2 - This has been moved to be part of the normal Payrun, you no longer enter the termination date on the employee master.

On TAB 6. Term.

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In most cases a Termination Date and a Reason code is all that is required.

Should this be a redundancy, then you must select the type and enter the Lump Sums into the correct fields.

Should this termination have an ‘ETP’, Eligible Termination Payment, then those details will also be enter here.

Minder Payroll will move any outstanding leave balances across and apply the correct taxation to the payout.

Reason Code

A Reason Code MUST be given as it is used by Services Australia to determine eligibility to certain programs. This also releases you of the need to do a ‘Separation Certificate’ as these are now redundant.

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Lump Sums

Lump Sum A Type R payments are all unused annual leave or annual leave loading, and that component of long service leave that accrued from 16/08/1978, that is paid out on termination only for genuine redundancy, invalidity or early retirement scheme reasons.

Lump Sum D payments represent the tax-free amount of only a genuine redundancy payment or approved early retirement scheme payment, up to the tax-free limit, based on the payee’s complete years of service.

Lump Sum A type T is for unused annual leave or annual leave loading that accrued before 17/08/1993, and long service leave that accrued between 16/08/1978 and 17/08/1993, that is paid out on termination for normal termination (other than for a genuine redundancy, invalidity or early retirement scheme reason).

Lump Sum W is a return-to-work amount is paid to induce a person to resume work, for example, to end industrial action or to leave another payer. It does not matter how the payments are described or paid, or by whom they are paid. We would normally expect to see the Lump Sum W amount included in superannuation guarantee calculations.

Employment Termination Payment’s (ETP)

The term 'employment termination payment' (ETP), as defined in section 82-130 of the ITAA 1997, is any payment made 'in consequence of the termination of a person’s employment that is received no later than 12 months after the termination', other than certain specified payments.
Not all payments made on termination are ETPs.
Examples of payments that are ETPs include, ex-gratia payments, golden handshakes and paid out sick leave.
Examples of payments that are not ETPs include, unused leave on termination and any salary and wages owing.
ETPs can consist of taxable and tax-free components.