There are two ways you can terminate an employee.
- Within the employee file
- Within a pay run
Terminating an Employee within the Employee File
The first, and simplest way is to open up the employee file, click on the “details” section and down the bottom of the page you’ll see a “Terminate Employee” button:
Clicking this button simply marks the employee as inactive and will no longer be eligible for pay runs.
NB. Please note that terminating an employee by using the Terminate Employee button at the bottom of the employee record / details page will not process a termination payment and the employee will not be notified. Similarly, if you reactivate an employee by using that option at the bottom of the details page of the employee record (of a terminated employee) the employee will not be notified.
Terminating an employee via the pay run
To do this, click on the employee within the pay run and then from the blue 'Actions' button select Terminate Employee':
A pop up will appear as follows:
Enter the employee's termination date and then click on 'Save'.
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.
With regards to the section on 'Leave Taken':
- Any leave category setup 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, deselect the 'Pay out' option;
- If any leave loading associated with a leave category (for eg annual leave loading) is to be paid out you will need to select the 'Apply x% 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 setup to not accrue automatically will not appear in this section.
N.B. If the employee is set up to be paid default standard hours each pay and is terminated mid-pay period, the employee's hours will automatically be re-calculated 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 pay runs and the employee line will be highlighted red.
N.B. If there are any unfinalised pay run for the employee, you will not be able to terminate until those pay runs have been finalised.
Cancelling a Termination
If you want to cancel the termination, click on the blue "Actions" box within the employee's pay details and then click on 'Cancel Termination':
Processing a Redundancy/ETP
Instructions on how to process a redundancy or ETP for an employee can be found here.
Termination Pays & PAYG
With regard to 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; and/or
- Financial Supplement debts.
Note - As of 1 July 2019, amounts withheld for study and training loans (this includes HELP/SSL/TSL and Student Financial Supplement Scheme) will be amalgamated into just one amount to be withheld. This amount will be calculated using the new Study and Training Support Loans tax tables.
This will be applicable to pay runs with a Paid Date on or after 1July 2019. In any pay runs with a Paid Date on or before 30 June 2019 the HELP & SFSS amounts will still be withheld. See here for further information.
The following article provides further information on how PAYG is calculated within termination payments:
If you have any questions or feedback please let us know via firstname.lastname@example.org