How to terminate an employee
Enter their final pay details
In the Calculation screen, enter any additional pay items required for their final pay.
Add payments to the pay calculation screen to pay any accrued leave. If the outstanding leave is for a period longer than the current pay period, you may wish to average the tax calculation over the number of pay periods that is being paid. For example, if you are paying a weekly employee 5 weeks of oustanding leave, in addition to hours worked for their last week, you could add a 'Tax Periods' pay item with the units set to 6, in order to average the tax calcualtion over 6 pay periods.
If the employee has an outstanding loan from the company, don't forget to enter a deduction to recover the remaining balance of the loan.
ETP Payment (Australia only)
If the employee is to receive an eligible termination pay, enter the employment termination pay using either the 'ETP Transitional Component' or 'ETP Tax Free Component' depending on whether the termination pay qualifies as a tax free payment or not. If it is to be taxed, the employee's preservation age is taken into account to calculate the tax due. You can set information to be used for the ETP payment summary by clicking on the More button in the calculate pay form for the employee, and then on the Misc button. You can add some properties used when the ETP payment summary is printed:
- ETPTransitional - true if the ETP is a transitional ETP payment
- ETPRelated - true if this payment is related to a previous payment for the same termination
- ETPDeath - true if this payment is a death benefit
- ETPDeathType - select if the death benefit is to be paid to a dependant or a non-dependant.
Enter their termination date
After you have entered their final pay details in the Calculation screen, you can then set their termination date.
In the Payee, Job Details screen enter their termination date in the End Date field. This will ensure that the system does not try to create a payslip when you open the next pay period.
Print a payment summary
According to regulations, an employee is entitled to receive an group certificate shortly after terminating employment. A certificate can be printed for a single employee if you wish. If a certificate is printed when they leave, another will not be printed at the end of the tax year.