Terminating an Employee

1. Click the Pay Run menu.
2. Click the pay run that needs an employee to be terminated.

3. Click the employee name that needs to be terminated.

   Warning

   An employee included in an unfinalised pay run means you can not use the Terminate Employee feature. You will need to finalise any existing pay runs first and then process their termination.

4. Click the Actions dropdown button.
5. Click the Terminate Employee button.

6. Complete the following fields:

   • Termination date. 
   • Leave Entitlement Date (Leave as is — this gets populated automatically. This is the employee's anniversary date.) 
   • Termination reason.

   Note: Actioning the termination should be the last action completed (i.e. after leave has been applied, earnings amended, pay run inclusions applied, etc). For example if termination is triggered prior to leave being paid in the pay run, this can cause the leave to be unpaid.

7. Click the Save button.

The employee's record will turn pink (as an indicator it is in termination mode) and will display calculated earnings and any accrued leave to be paid out as part of the termination pay.

The Leave Taken Section

Regarding the Leave Taken section:

• Any leave category set to be paid out on termination will automatically be calculated as part of the termination pay. If you do not wish for this to occur, untick the checkbox for Pay out.
• If any leave loading associated with a leave category (‌e.g. annual leave loading) is to be paid out, you need to tick the Apply loading checkbox.
• If you want to pay out a balance for an associated leave category that does not have the 'Pay out' option automatically selected, you will need to manually select this option.
• Any leave categories set up to not accrue automatically will not appear in this section.

If the employee is set up to be paid default standard hours each pay and is terminated mid-pay period, then the employee's hours will automatically be recalculated on a pro-rata basis. We strongly suggest you double-check these hours to ensure they are correct.

Once you have finalised the pay run, this employee will no longer be active or eligible to be included in future-dated pay runs. The employee line will also be highlighted red. If there are any unfinalised pay runs for the employee, you will not be able to terminate them until those pay runs have been finalised.

If the terminated employee is included in a pay run for their primary pay schedule dated before their termination date, they will be included with a red asterisk (*) next to their name.

1. Click the Pay Run menu.
2. Click the pay run that needs an employee termination cancelled.
   
3. Click the employee name who needs a termination payment cancelled.
4. Click the Actions dropdown button.
5. Click the Cancel Termination button.
   

If an employee is terminated on a pay run as part of the Single Touch Payroll (STP) process, the corresponding Pay event will communicate this to the ATO along with any Employee Termination Payments (ETP). As part of this, they will automatically be marked as "Is final" and will not show on future STP submissions of the affected pay schedule.

Instructions on how to process a redundancy or ETP for an employee can be found here.

Regarding study and training loan payments withheld on termination, as per the ATO, when working out Marginal Tax Rates, you do not withhold any amount for:

• Higher Education Loan Program (HELP) debts.
• Student Start-up Loan (SSL) debts (includes ABSTUDY SSL debts).
• Trade Support Loan (TSL) debts.
• Financial Supplement debts.

This article provides further information on how PAYG is calculated within termination payments.

We are unable to generate Separation Certificates directly from the Platform. This is a limitation of the functionality of the platform. However, we have some alternative options for you to submit the certificate.

You can choose to submit an ESC online through Business Hub or by using a paper form. Please note that submitting a certificate through STP is not possible. However, if you report via STP, the ATO automatically receives certain cessation information, which has greatly reduced the number of separation certificate requests for employers.

For more detailed information on how to submit the certificate, please visit the ATO page- Employment Separation Certificates for employers

1. Click Employee, then List.
2. Click the employee who needs to be terminated.
3. Scroll to the bottom of the page.
4. Click Terminate Employee.
5. Enter a termination date.
6. Enter a termination reason (optional).
   Note: This process will terminate the employee and mark them as inactive. This will mean that they are no longer eligible to be included in pay runs.

If an employee is terminated using this method, they will automatically be marked as "Is final" on their last STP pay event. Please note that terminating an employee using this method will not process a termination payment, and the employee will not be notified. 

Employees can only be deleted if they have not been included in any pay runs. Deleting an employee cannot be undone, and you will not be able to retrieve this data.

1. Click Employee, then List.
2. Click the employee that needs to be deleted.
3. Scroll to the bottom of the page.
4. Click Delete Employee.
5. Click Delete.