Process final pay for a redundancy
When employment ends due to a redundancy, set the employee's termination date and make any tax-free payments in addition to unused leave in their final pay. Terminations due to invalidity and early retirement scheme can also be done using this process.
Before you start
- Approve any pending leave requests dated before the employee's termination date.
- Reject any leave requests dated after the employee's termination date.
Process a redundancy in the final pay
- In the Payroll menu, select Pay Runs.
- Select the relevant draft pay run.
- Click the employee's name.
- Click Set as Final Pay at the bottom of the payslip.
Select the last day of their employment as the termination date, and click OK.The termination date must be before the end of the current pay period.
- Select Genuine Redundancy / invalidity / early retirement scheme.
- Click Save.
Enter the tax-free payment under Fixed Amount on the Redundancy line in the payslip.
Any amounts greater than the tax-free threshold require manual tax calculations.
Redundancy and early retirement (ATO Website)
- Review the employee's payslip, including:
- Outstanding wages for hours worked.
- Accumulated leave for the final pay adjustment.
Tax on unused leave included in final pay
When the pay run is posted, the termination date automatically applies to the employee and they'll move to the History tab in your list of employees.