How do I generate a employment termination payment?
An employment termination payment (ETP) is a payment received by an employee because their employment was terminated. Not every terminated employee receives an ETP - it depends on what the termination pay is made up of and whether any of those payment types fall into the ETP classification. A list of what is destined as an ETP can be accessed here. ETP's are broken down into 'codes' and treated differently for tax purposes. A list of each ETP codes can be accessed here.
Step 1 - Setup an ETP Pay Type:
In the Add A New Employment Termination Payment window:
Add the ETP pay type to the employee's final pay:
E.g. According to the ATO, lump sum termination payments for unused annual leave, unused long service leave and unused sick leave are not part of an employee's ordinary time earnings (OTE). ... Therefore, none of these termination payments would attract super contributions.
An example of the pay slip: