Summary

Termination Reasons are important in Australian databases because the Termination type determines how ETP is taxed.

Termination type

The Termination type in the Termination Reasons record determines how PayGlobal taxes an ETP by applying special tax rates in the following situations:

• Bona-fide redundancy or approved early retirement

  Compensation, harassment, discrimination, and unfair dismissal are taxed at the same rates as redundancies, but these termination reasons need to have Termination type = "Bona-fide redundancy or approved early retirement".

• Invalidity (permanent disability)

  The invalidity value is displayed in the Post-June 1994 invalidity component field on the Employee Terminations - Cash Amount tab and the Employee Terminations - Pre-Payment Details tab.

• Death - Payment to Dependant

  Pay the ETP to a dependant and the ETP is non-taxable.

• Death - Payment to Non-Dependant

  Pay the ETP to a non-dependant and the ETP is non-taxable.

• Death - Payment to Trustee

  Pay the ETP to the deceased's estate and the ETP is non-taxable.

• (Blank)

  If the Termination type field is empty, then PayGlobal applies the normal tax rate for the termination. For example, the RESIGNED and RETIREMENT records do not match any termination types so their Termination type fields are blank and the special tax rates do not apply.

The Termination type is used in the PGPRTAXA019 - ETP Payment summary report.

Cessation reason

The Cessation reason is used for reporting to Services Australia why employment has ended. Reporting of these reasons is a mandatory requirement for STP Phase 2.

Available options:

• [blank]
• Voluntary Cessation
• Ill Health
• Deceased
• Redundancy
• Dismissal
• Contract Cessation
• Transfer

  NOTE: There is no validation to align these reasons with the existing Termination Type field