Terminate Employee – The Termination Wizard

When an employee leaves, the Termination Wizard makes it very easy to calculate the termination pay. It will automatically calculate any leave owing, and the tax due on any Eligible Termination Payments (ETP). Elite Payroll's termination pay is calculated in line with the ATO's example as provide on the weekly tax coefficient sheet.

Terminating an employee

1 Start the Termination Wizard and select the employee you want to delete in any one of the three following ways:

$image\bullet.gif$ From the Process Pays Tour Guide section, click Terminate an Employee and then select the name of the employee you want to delete from the Name drop-down list;

$image\bullet.gif$ Choose Terminate Employee from the Activities menu and then select the name of the employee you want to delete from the Name drop-down list; or

$image\bullet.gif$ Select the employee from the Employees list and then choose Terminate Employee from the Activities menu. If you have a lot of employees, this is probably the fastest way to find the employee name.

2 When the Termination Wizard appears, enter the requested information and click Next after each step is completed.

Press F1 while the Termination Wizard is open for further information on each step. This will bring up Elite Payroll Help with instructions for that specific section.

3 Reason for Termination – Select a Reason for Termination from the drop-down list and select the reason you are terminating the employee. Elite Payroll will calculate the tax differently, depending on which option is selected.

If you select Redundancy as the reason for terminating an employee, the following rules apply:

$image\bullet.gif$ PRE 18-August-1993 Annual Leave is placed in Lump Sum A.

$image\bullet.gif$ POST 17-August-1993 Annual Leave is placed in Lump Sum A.

$image\bullet.gif$ PRE 16-August-1978 Long Service Leave is placed in Lump Sum B.

$image\bullet.gif$ POST 16-August-1978 Long Service Leave is placed in Lump Sum A.

$image\bullet.gif$ POST 17-August-1993 Long Service Leave is placed in Lump Sum A.

$image\bullet.gif$ Any leave loading applicable will have up to $320 tax-free.

4 Hours Normally Worked In A Pay Period – Check that the hours are correct. If they are wrong then the leave pay out will be incorrect. Click Next.

5 Payments for unpaid work – If the employee hasn't yet been paid for work done, select $image\radial.gif$ Yes Pay the employee and click Next. The Add a Termination Pay window will be displayed, allowing you to enter the final pay. Enter the final pay details and then click OK.

If the employee has no outstanding payments for work done, select $image\radial.gif$ No, Do Not Pay The Employee and then click Next.

6 Outstanding Long Service Leave – If the employee had any Outstanding long service leave, check that the calculated figures are correct. If they are, click Next.

Long Service Leave shows you the dollar value of long service leave, and what period it applies to. When working out how much leave is applicable for each payroll period, Elite Payroll factors in the number of hours a week the employee normally works, and what their leave entitlement is.

7 Outstanding Annual Leave – Check that the annual leave and leave loading are correct. These values are based on the employee's Normal Hour settings in their employee record. The number of hours in a pay period comes from this pay rate. Elite Payroll also uses the employee's start date to calculate how much should go into each period. Click Next.

8 Eligible Termination Payments (ETP)If this pay includes any ETP, click Yes. If not, click No. Click Next.

ETPs paid by employers are lump sum payments in consequence of termination of employment. They include lump sum payments made upon resignation, retirement, death, that part of approved early retirement payments in excess of the tax free limits, that part of bona fide redundancy payments in excess of the tax free limits and invalidity payments.

9 If you selected Yes, enter the ETP details, including the amount taxable and the employee's tax-free threshold. Elite Payroll will calculate the tax according to the figures you enter. At the end of the year, the employee will receive two Payment Summaries, one for Lump sums A, B, D and E. Lump sum C is for ETP payments—these will be placed on their own separate ETP Payment Summary. Click Next.

10 Termination Wizard Completed – Enter the date the termination pay is being processed for, and check that the calculated figures are correct.

Gross – All outstanding pay amounts are placed into the "Gross" of the termination pay.

Lump Sums – Any lump sums that you may want to pay the employee on top of their termination pay.
If you wish to pay an employee any extra amounts, such as a "golden handshake", enter the figure into Lump Sum D.

Example If you decide that you want to pay your employee an extra $5000 because they have worked for the company for 10 years, you would enter the figure into "Lump Sum D". This figure would then appear in the "L Sums" field to the right.

11 Click Finish and then click Yes to confirm that you really do want to terminate the employee.