Terminating an Employee

Termination of an employee is normally done through the normal Payroll run. In circumstances where this would be too late, then you will need to do a Sub Run 2 in order to process the pay ‘Out of Cycle’.

Step 1

From the ‘Select an Employee to Pay’ browse screen, select the terminated employee.

In this example, the employee has worked up until there termination, so we pay those hours as normal:-

Note that this employee is owed Annual Leave.

Step 2

The value of the Annual Leave (plus any Holiday Loading), needs to be recorded on TAB6 - Termination

In this case we have 126.58 hours @ $25.00 per hour = 3164.50 X 1.175 (17.5% holiday loading) = $3718.29

So in TAB 6

Enter the Termination Date
Reason, select one (Voluntary, Redundancy, Dismissal) etc
Since this is a Voluntary termination (employee has resigned), then the Redundancy Type = Other.
The value of the outstanding leave + loading, is in a Lump Sum A.

This is the most common scenario. If you are dealing with a Deceased Employee or a Genuine redundancy, then different rules apply. Please contact Support, or your Accountant in those cases.

Note - there in NO ETP payable in this case (the Annual leave is not an ETP). Again, see your Accountant for advice or consult the ATO web link below.
ATO website → Employment termination payments for employees | Australian Taxation Office

STEP 3

If you now jump back to TAB 1

The outstanding value of AL + Loading (if applicable) is in the Redundancy field.
The Tax has been calculated according to the ATO Schedule 7 – Tax table for unused leave payments on termination of employment | Australian Taxation Office
See also this ATO website for what else may be included : - Accrued leave | Australian Taxation Office

STEP 4

The procedure is complete, you would now process the Payroll as normal.