Termination packages can only be applied to a main pay run where the termination date is within the pay period.
You can only select one employee per termination package.
Termination Reason
Not mandatory.
Completed if you want to report on predefined termination reasons through the report builder, e.g., Transfer to NZ.
Reasons can be customised through Company → Company Options → Configure Company Reasons.
STP Termination Reason
Mandatory.
Required by the ATO for reporting through STP Phase 2.
Termination Payment Type
Normal Termination - Treats as normal termination.
Genuine Redundancy - Includes the Redundancy payment in the Other Payments step and changes how the Long Service Leave tax periods are taxed.
Leave balance includes accrual calculated until the termination date if the employee is on standard accrual and has a work pattern setup.
If the employee is on proportional accrual, then the system won’t calculate any additional balance as there is no method to base the calculation on. The leave balance will be as at the latest closed pay period.
Leave loading is only included in the calculation if setup to automatically pay with the annual leave components instead of it being defined as its own component, e.g., when leave is taken there are separate components for annual leave and leave loading.
Approved leave requests that have yet to be processed will not alter the leave balance until the termination package is included in the pay run.
Tax Periods
Depending on the termination type, the tax periods leave balances have been loaded into will be taxed differently.
Tax Period | Genuine Redundancy | Normal Termination |
|---|---|---|
Pre-16 August 1978 | Lump Sum B | Lump Sum B |
16 August 1978 to 17 August 1993 | Lump Sum A | Lump Sum A |
Post-17 August 1993 | Lump Sum A | Gross Payments |
Leave balance includes accrual calculated until the termination date if the employee is on standard accrual. Work pattern is required if balance is held in hours.
If the employee is on proportional accrual, then the system won’t calculate any additional balance as there is no method to base the calculation on. The leave balance will be as at the latest closed pay period.
Approved leave requests that have yet to be processed will not alter the leave balance until the termination package is included in the pay run.
DataPay does not calculate termination balances based on completed years of service, e.g., NSW >15 years. The leave balance will include accrual from partial years' service. Any changes will require manual override.
Refer to Fair Work for termination and redundancy payment entitlement information.
Redundancy Payment
This is only automatically included if the termination type is Genuine Redundancy.
Relevant Start Date refers to the field Employment Start Date found in Employee → More Details. If a value doesn’t exist, then the Start Date will be used. The purpose of using an earlier date is to reflect continuous service as it applies to redundancy.
Termination Notice
If an employee or employer has not given sufficient notice, untick Sufficient notice was given by the termination party and the wizard will calculate the notice period entitlement for the employee.
Additional Unused Leave
Only required if other leave types are to be paid on termination.
New Payment
Any other payments that need to be included can be added into the New Payment section.
Multiple additional payments can be added if necessary.
When the termination package is applied to the pay run, all New Payments will be summarised by either Superable or Non-Superable. If you want to specify which components apply to which payment, this must be done manually in the pay packet after the termination package is applied and not here.
Refer to the ATO for information of correct ETP code usage.
If an ETP Payment has been calculated, the amounts will prepopulate are require a coding. Split coding can be applied if required.
A summary of the termination including all payments and the calculated tax are displayed.
Warnings, if applicable, will be displayed at the bottom, e.g., unprocessed leave requests, overridden leave termination value, etc.
A PDF copy can be downloaded by selecting the icon in the top right.
To complete the preparation of the termination package, click the Finish button.
Once a termination package has been created, it can either be applied to a pay run or deleted.
