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.

Only gross wages and lump sum items can be included in the final pay. ETP's need to be paid and have a payment summary completed manually.

Before you start

Before processing a redundancy, make sure you:

  • Approve any pending leave requests dated before the employee's termination date.
  • Delete any leave requests dated after the employee's termination date.
  • Check that the employee's paid leave entitlements will be paid out on termination.

    Set unused leave as paid on termination

Process a redundancy in the final pay

  1. In the Payroll menu, select Pay Runs.
  2. Select the relevant draft pay run.
  3. Click the employee's name.
  4. Click Set as Final Pay at the bottom of the payslip.
  5. 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.

  6. Select Genuine Redundancy / invalidity / early retirement scheme.
  7. Click Save.
  8. 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.

    Pay as you go withholding on payments to employees made redundant (ATO Website)

  9. Review the employee's payslip, including:
  10. Process the pay run.

When the pay run is posted, the termination date automatically applies to the employee.

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