When terminating an employee, they may be entitled to several lump sum payments. These lump sum payments may be employment termination payment (ETP), including:
payments in lieu of notice
redundancy pay payments
A full list can be found on the ATO's website.
Creating termination types
To create termination types in your account, navigate to Payroll > Payroll Settings and select 'Termination Types'
Click '+ NEW' to add a termination type and complete the following fields.
Applying termination payments to an employee's final payslip
On the employee's final payslip, click "+ ADD" to create a termination payment line.
Enter a Taxable Amount and, if applicable, a Tax-Free Amount, based on the ATO's Table 20.
Tax calculations are then automated for Termination Payment Types "Other" and "Redundancy". Other termination types require a manual tax calculation.
Termination payments will appear as follows on the employee's payslip.
