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Only available to Australian businesses using Unmarried Touch Payroll reporting

An employment termination payment (ETP) is a lump sum payment made to an employee considering their employment has finished.

ETP includes payments for unused rostered days off, payments in lieu of find, a gratuity or 'gold handshake', and more. For a full listing of payments that are and are not ETPs, meet the ATO website.

ETP does non include payments for unused annual leave. For more information on paying out unused almanac get out to a terminated employee, run across Processing a terminal pay.

And because you lot'll be reporting your ETPs to the ATO with Single Bear upon Payroll, in that location's no need to create separate payment summaries for your employees. Just ready up your ETP pay items and do a pay run. Piece of cake!

i. Ready ETP pay items

Setting up ETP pay items

Before processing your get-go ETP, y'all need to set ETP pay items. To exercise this, yous need to be set for Single Touch Payroll reporting.

ETPs can exist made up of taxable and non-taxable earnings, and tax-withheld deductions. We'll step you through how to create all 3 pay items beneath, but you may not utilize all iii for each ETP you pay. Please see the ATO website or speak to your accountant if you're unsure what a terminated employee is owed.

Creating the ETP taxable earning

1. Become to the Pay items page (Payroll > Pay items).
2. Click Create earning.
   The Create new earning window appears.
3. Choose ETP from the Blazon dropdown box. If ETP isn't listed, make sure you're fix for Single Touch Payroll reporting.
4. Enter a Name and Name for payslip. Nosotros recommend naming it ETP - Taxable or like to hands find it in your earnings lists and place it on the payslips.
5. In the Rate dropdown, choose Fixed.
6. Enter 0 in the Amount $ field.
   Yous can change the corporeality when you procedure an ETP pay run.
7. In the Tax field, choose Taxable.
   The ATO reporting category is automatically set to ETP - taxable.
   The earning details will look similar to this:
   
8. Click Salve.

Creating the ETP non-taxable earning

1. Go to the Pay items folio (Payroll > Pay items).
2. Click Create earning.
   The Create new earning window appears.
3. Choose ETP from the Type dropdown box.
4. Enter a Name and Name for payslip. Nosotros recommend naming it ETP - non-taxable or similar to easily detect information technology in your earnings lists and identify it on the payslips.
5. In the Charge per unit dropdown, choose Fixed.
6. Enter 0 in the Amount $ field.
   Yous can change the amount when you procedure an ETP pay run.
7. In the Tax field, choose N on- Taxable.
   The ATO reporting category is automatically set to ETP - Not-taxable.
   The earning details volition look similar to this:
   
8. Click Save.

Create the ETP revenue enhancement-withheld deduction

1. Go to the Pay items folio (Payroll > Pay items).
2. Click Create deduction.
   The Create new deduction window appears.
3. Choose ETP from the Type dropdown box.
   After choosing ETP, the Revenue enhancement field is automatically set to Later on tax, and the ATO reporting category is automatically ready to ETP - Tax withheld
4. Enter a Name and Name for payslip. Nosotros recommend naming it ETP - Tax withheld or like to hands observe it in your earnings lists and identify it on the payslips.
5. Enter 0 in the Amount $ field.
   Y'all can change the corporeality when you process an ETP pay run.
   The deduction details volition look similar to this:
   
6. Click Salve.

2. Assign ETP pay items to terminated employees

Processing an ETP pay run

Afterward you've prepare the ETP pay items, y'all're ready to assign the ETP pay items to your terminated employees.

The ETP pay items used may differ from employee to employee, and depends on a number of factors. If yous're unsure which of the three ETP pay items to add, check with the ATO or your accountant.

1. Go to the Payroll menu and click Employees.
2. Select the terminated employee.
3. Click into the Pay items - earnings & deductions tab.
4. Under Earnings, click into the Add together earning... dropdown listing and select the ETP taxable earning and/or the ETP non-taxable earning.
5. If you need to add the ETP tax-withheld deduction, select it from the Add deduction... dropdown list under the Deductions heading.
6. When y'all've finished adding the ETP pay items, click Save.
7. Echo steps 2-6 for every terminated employee who needs an ETP.

3. Process an ETP pay run

Processing an ETP pay run

After you've set upwardly your ETP pay items and added them to the terminated employees, yous're set up process the ETP pay run.

1. Click into Payroll menu and select Enter pay.
   The Pay centre page appears.

2. Select only the employees who need ETPs.

   Note that this pay run should only include ETPs. If you also demand to pay out normal earnings or unused go out, do and so in a separate pay run. Come across Processing a final pay for more information.

3. Click Start pay run.
4. For any non-ETP earnings or deductions, enter 0 in the Hours or Corporeality column. This is because you should only pay ETPs in this pay run.
5. Enter required amounts in the ETP fields.
6. Click ETP do good type button.
   
   The ETP do good type window appears.
7. Select a benefit type from the dropdown list and choose a do good code. If unsure, cheque with your accounting advisor or the ATO.
8. When y'all're finished, click Salve.
9. Click Review payslips.
   The Review payslips page appears
10. Double check the ETP amounts on the pay slips to ensure they're correct.
11. Click Finish pay run.
    The Pay run summary page appears.
12. Click Looks good.
13. A window appears asking you to authorise sending this payroll information to the ATO.
14. If you are the authorised sender, enter your proper name in the Authorised sender field, and click Send.
    
15. A bulletin appears asking you to impress your pay slips and finish the pay run.
    Afterwards making a pick, a Pay Run Consummate confirmation message appears.

4. Notify the ATO

As part of your Single Touch Payroll reporting, you need to notify the ATO of the termination. This lets the ATO know the employee's termination date and any ETP components in their final pay.

Here'southward how:

1. Go to the Payroll menu and choose Payroll reporting.
2. Click Employment terminations.
3. Select the employee, choose their concluding day of employment, and so click Notify the ATO.
   
4. Enter your proper noun as the authorised declarer and click Send.

This declaration is processed in the same way other Single Bear upon Payroll reports are. They must be accepted by the ATO, which can have up to 72 hours.

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Source: https://help.myob.com/wiki/pages/viewpage.action?pageId=30180156

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