Summary

The Employment Termination Payments tab contains the ETP allowance codes from Company Settings - Termination Allowances.

You will need to manually enter the amounts you are obligated to to pay your employee(s) associated with the ETP, such as genuine redundancy, early retirement scheme, golden handshake and invalidity payment.

Please ensure you understand the the obligations set out in the NES and your employee(s) Awards, especially which employees are eligible. Always seek legal advice to ensure compliance and avoid potential disputes.

The amount to pay is required to be manually entered into the ETP record.

Qualify as tax-free up to limit

PayGlobal uses these fields only if the Employee Termination (ETP) record is associated with a termination type of "Bona-fide redundancy or approved early retirement". For this type of record, PayGlobal sets all termination payments to Qualify as tax-free up to limit = "Yes".

PayGlobal calculates the tax-free component based on the employee's years of service and subtracts this component from the ETP amount before it calculates tax for that payment.

If you change any of these fields to "No", PayGlobal does not subtract the tax-free component from the ETP amount for that payment.

Excluded/Non-excluded payment

Redundancy payment, Retirement payment and Invalidity payment have Excluded/Non-excluded payment = "Excluded" by default. Other payments are "Non-excluded" by default.

Note: If the Termination Reason has Termination type = "Invalidity (permanent disability)", then all payments are "Excluded" by default.

When you change the Termination reason, leave credit and sick leave payments default to Qualify up to tax-free up to limit = "No" and Excluded/Non-excluded payment = "Non-excluded".

Redundancy Payouts

Redundancy payments reflect the payment obligations of a "genuine redundancy".

The formula for calculating your employee’s redundancy payment is Base Rate of Pay x Redundancy Pay Period

The base rate of pay is the rate payable to your employee for their ordinary hours of work but does not include:

• incentive-based payments and bonuses;
• loadings;
• monetary allowances; or
• overtime or penalty rates.

Importantly, continuous service is the period during which you employ the worker, excluding any period of:

• unauthorised absence;
• unpaid leave; or
• unpaid authorised absence.

  Note: The redundancy pay period declines to 12 weeks after ten years of service because these employees are also entitled to long service leave entitlements.

Employee’s period of continuous service with employer

Redundancy pay period

At least 1 year but less than 2 years

4 weeks

At least 2 years but less than 3 years

6 weeks

At least 3 years but less than 4 years

7 weeks

At least 4 years but less than 5 years

8 weeks

At least 5 years but less than 6 years

10 weeks

At least 6 years but less than 7 years

11 weeks

At least 7 years but less than 8 years

13 weeks

At least 8 years but less than 9 years

14 weeks

At least 9 years but less than 10 years

16 weeks

At least 10 years

12 weeks

Retirement payment

Retirement payments reflect the payment obligations of "early retirement schemes" (i.e. an ATO-approved plan that offers employees incentives to retire early or resign when the employer is rationalising or reorganising their business operations)

Populate if required to pay else leave blank

Invalidity

Invaldity payments reflect the payment obligations of an employer must pay to an employee who can not longer work in this role due to the employee sustaining a permanent disability

Populate if required to pay else leave blank

A gratuity or golden handshake payment

A gratuity or golden handshake payments reflect the payment obligations of the company's policies.

Populate if required to pay else leave blank

Other payments

There are two fields allowing for you to make lumps of two separate allowance payments that reflect any other payment obligations from your company's policies.

Populate if required to pay else leave blank.

Total leave credits

If the employee's leave credits have Payout on termination = "Yes" and Payout Method = "ETP", then PayGlobal automatically copies them into the Employee Termination when you save the record.

In lieu of notice

If the employee is not required to work through their notice period and is not going to take any other form of paid leave, then it is common for you to be required to pay them an 'In lieu of notice' payment to cover the ordinary hours that span the last day of actual work to their official termination date. For this payment you should only need to enter the hours, the system should be able to automatically determine the correct rate for you. But you can override this if needed.

Populate if required to pay else leave blank

Sick leave

Under Fairwork, Sick and carer’s leave is not required to be paid out when employment ends. But your company's policies and any relevant awards or agreements that apply to the employee may say to do so, please check these.

If you have setup unused Sick leave to be payable on termination PayGlobal automatically copies across the employee’s sick leave rates and accruals. You will need to verify the values in conjunction with any sick leave that is being taken in the final pay.

Leave without pay (LWOP)

These values are necessary for calculating the length of continuous service and used in the Long Service Leave calculations.

LWOP prior to 1 July 1983:

Enter the number of LWOP days taken before 1 July 1983. Disabled if the employee's Start date is after 30 June 1983.

LWOP since 30 June 1983:

tEnter the number of LWOP days taken since 30 June 1983.