Correcting manually processed ETPs

When a payment that is meant to be an ETP has been processed incorrectly without an ETP record, the termination pay will not be reported as an ETP via STP.

In this article we will go through an example where a Redundancy was processed with an Ex-Gratia payment without an ETP.

The Tax in the initial termination payment was adjusted to exclude all tax on the Ex-Gratia payment

The audit log shows that no Lump Sum D recorded for this pay

Note that all manual pays opened to correct the termination pay should only be used for the affected employee.

To resolve this issue, you will need to follow the steps below.

Step 1

Add the ETP record in the employee record:

• Go to Payroll > ETP

• Edit the employee record and add the ETP record in line with the requirements found in the help article on Understanding eligible termination payments (ETPs) (Australia)

Step 2

• Open a manual pay for the period the terminated employee is assigned to.

• Go to Transaction View and open the manual pay

• Add the Termination Allowance. You will see that there is an ‘Employee termination record’ populated.
  

• F9 to process the pay.

• The Audit log of this pay will show the Lump Sum D now has the Ex-Gratia amount listed.
  

• You will see a Tax Override. This will be from the TP Module.

• Process and close the manual pay.

• Send the STP Submission for this manual pay to the ATO.

Step 3

• Open another manual pay for the employee to correct the original payment.

• Add the termination allowance

• Add the allowance incorrectly processed and process the reversal.

• Add a Tax override with the amount to offset the PAYE in the EPT Correction pay. In this example it is $0.00. (If the tax in the ETP correction pay was 1000, the Override amount will be -1000)

• F9 to process the pay

• Close the pay

• Send the STP Submission for this manual pay to the ATO.

More information regarding this can be found in our AU Tax Year End Procedures or in our AU Tax Frequently Asked Questions.