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Terminating an Employee


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Introduction

This topic describes how an employee can be terminated in Ready pay (powered by Aussiepay).

NOTE: Throughout the termination screen, key fields have a question mark item next to them. Hovering your mouse over these icons will provide more information about the field.

Processing a termination

To terminate an employee:

  1. Go to the Employees screen using the menu
  2. Use the search filters or the page navigation links at the bottom of the screen to find the employee if required
  3. Hover your mouse cursor over the Edit button to the left of the employee’s name
  4. Select the Terminate menu item from the fly out menu
  5. Enter the employee’s Termination Date
  6. Select the Termination Reason from the dropdown box

    NOTE: The only termination reasons that are available are those termination reasons which affect the tax treatment of the employees termination payment.

  7. At the Payroll Processing Method field, select either:
    • Next Payroll if you want to pay the termination in your next normal payroll or
    • Adhoc Payroll if you want to make the payment in an adhoc payroll
  8. If processing the termination in an adhoc payroll:
    • Update the Payroll Dates fields (you must specify an Accounting Date that is on or after the employee’s termination date)
    • Place a tick in the Adjust All Salaryt Packaging to $0 checkbox if the employee has salary packaging items set up but you do not want these deducted from the termination pay
  9. Select a Payment Type:
    • No Pay: No Payment will be made to the employee
    • Standard Pay: Amy statutory payments such as Leave on Termination will be paid automatically to the employee when you process the termination in a payroll
    • Pay Additional Amounts: Any statutory will be paid to the employee automatically and you will also have the opportunity to pay any Time in Lieu of Notice or (Employer Termination Payment (ETP) amounts
    • Make Manual Adjustments: This option is only used internally by Ready pay (powered by Aussiepay)
  10. In the Pay By dropdown, select the method of payment that you would like to use for the employee’s termination payment
  11. If Pay Additional Amounts was selected as the Payment Type, you can use the Pay Leave field to pay any Personal Leave accrual out
  12. If you are paying out Personal Leave, you will need to specify whether the Personal Leave is paid only due to the termination reason
  13. If Pay Additional Amounts was selected as the Payment Type, you will need to enter the additional amounts into the ETP Codes section.

    NOTE: The ETP codes section allows you to enter a combination of dollar amounts or hours against any ETP Code that is valid for the selected termination reason. You will need to enter a zero into any fields that you do not have a value for.

  14. If your ETP amounts include an amount for Time in Lieu of Notice, enter the Time in Lieu of Notice portion into either the Time in Lieu of Notice Dollars Portion or Time in Lieu of Notice Hours Portion (depending on if you have the amount worked out as dollars or as hours)

    NOTE: This step is important to ensure that Superannuation is calculated correctly

  15. Click the Save Changes Button

If you selected Next Payroll as the Payroll Processing Method, the employee’s termination will be picked up automatically in the next payroll that has an accounting date on or after the employee’s termination date. If you selected Adhoc Payroll as the Payroll Processing Method, you will be taken straight to an adhoc payroll where you can process the employee’s termination.

ETP Codes

An ETP code describes the type of the additional payment that you are making to an employee when they are terminated.

The are five ETP codes which are outlined in the following table.

ETP Code Description
O Other ETP not described by R, for example, golden handshake, gratuity, payment in lieu of notice, payment for unused sick leave, payment for unused rostered days off
R ETP because of early retirement scheme, genuine redundancy, invalidity or compensation for personal injury, unfair dismissal, harassment and discrimination
T Death benefit ETP paid to a trustee of the deceased estate
D Death benefit ETP paid to a dependant of the deceased
N Death benefit ETP paid to a non-dependant of the deceased

NOTE: Time in Lieu of Notice should typically be paid as Code O, except in the case of Genuine Redundancy where the Time in Lieu of Notice is typically considered Code R.

NOTE: For further clarification about which ETP Code applies to your additional payment(s), you should contact the Australian Taxation Office for assistance.

Employee Access After Termination

After an employee’s termination has been processed through a Payroll, the following will occur:

  • Their status will be automatically changed to Inactive
  • They will automatically be excluded from future payrolls
  • Any authority access that they had will be automatically revoked, for example:
    • They will not be able to view or manage leave for their team
    • They will not be able to view or manage expense reimbursements

    • They will not be able to run payroll or perform other administrative tasks
  • They will still be able to access their own details through ESS, for example:
    • They will be able to update their contact details
    • They will be able to view their payslips
    • They will be able to view their Payment Summaries

NOTE: If you want to complete revoke all access to the system for employees after termination, you will need to do this manually by removing the relevant employee web roles. However, we recommend that employees should retain access to update their details and view the Payment Summaries at least until after they have recieved their final Payment Summary from your organisation.

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Employees
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Need more help?

Employees
Contact your Employer
Payroll Administrators
Contact your Payroll Consultant