To select Termination Package, select on the drop down at the bottom of the Termination Package button as highlighted below then select the Termination Package option that appears.
Selecting the main icon won’t load the termination wizard.
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 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.
All payments will be summarised by either Superable or Non-Superable. If you want to specify which components apply to which payment, then this must be done in the pay packet after the termination package is applied.
The ETP Payment step will display the ETP amount calculated for the employee. The ETP code is also able to be specified in this step.
The Summary page displays the individual payments and where each payment should be reported. This page also calculates the estimated tax for each component. A PDF copy of the Summary page can be downloaded via a button in the top right corner.
A list of Warnings (if any) will also be displayed at the bottom of the Summary page information. For example if there are any unprocessed Leave Requests, a Termination Value for a leave type is negative or zero etc.
Clicking the Finish button on the Summary step will create the Termination Package for this employee. This package is now available to be applied into a Pay Run for payment. Uncompleted packages will remain as Drafts, and will not be available for use in a Pay Run.
Once a Termination Package has been created, it can either be applied to a Pay Run, or Deleted.
Please note:
There is no need to terminate the employee under Employee Details, when applying termination packages to a pay packet.
If you terminate an employee under Employee Details the employee will no longer be available to select in the termination wizard. Therefore this employee will have no termination packages to apply to the pay packet.
If a termination package is created for an employee, the terminate employee button under Employee Details is disabled. To enable the terminate employee button, the termination package will need to be deleted.