Understanding eligible termination payments (ETPs) (Australia)

To enter an ETP for redundancy

1. Once you have the figures you want to pay out, open the Employee Record and go to Payroll > ETP tab.
2. Edit the employee record, right click and select Add Record or click Insert.

3. On the Details tab, complete all of the fields.

   

   Ensure you select the correct Termination reason and that the Termination type shows correctly for a redundancy.

   
   

   

4. Go to the Employment Termination Payments tab.

5. Add in the amounts to be paid:

   • Usually redundancy amount, In lieu of notice hours etc.

   • Make sure you correctly set the Excluded and Non-excluded fields, as per ATO legislation.
     

     

6. If you have nothing else to pay, click Save & Close. You'll see a message asking if you want to confirm this ETP.

   

7. Click Yes. You'll se a second message asking if you want to confirm this ETP.
   

   

8. Click Yes.

9. Save the employee record and go to Transaction View.

10. Select the sequence (standard or manual) and insert your termination transaction against the employee.

    When you select the termination allowance, the ETP details will be bought through to Transaction View. See below:
    

    

11. If you need to pay the employee long service leave pro rata and entitled balances, make the necessary changes.

12. Click Yes.

13. Process the pay and save the transactions.

14. Check the log file. The ETP will be paid into the Lump Sum fields, and so will the leave payouts, based on years of service etc. See an example log file below:
    

    

15. You can now process and close the pay from the PayGlobal tree.

1. Open the employee record on the ETP tab.
2. Edit the employee record and open the ETP

3. On the Details tab, right-click and select Add Adjustment.

   

   Don't click Edit on the ETP.

   

4. Complete the Description and the Date of payment fields.

5. Go to the Employment Termination Payments tab. The original ETP's figures will be displayed.
   

   

6. Change the figure to what you want the total of both ETPs to be.
   For example, if you paid a redundancy amount $50000 and you want to pay them $10000 more, then you would change the Redundancy amount to $60000.
7. If you want to reverse the ETP completely, change all of the amounts to zero.
8. When PayGlobal processes the ETP Adjustment, it reverses the entire original (Except AL & LS) then pays the new amounts. This is due to the thresholds. Original ETP:
   

   

9. Adjusted ETP:
   

   

10. Save and close the ETP.
11. Confirm the ETP.

1. Open the employee record on the ETP tab.
2. Edit the employee record and open the ETP.

3. On the Details, right-click and select Add Related Payment.

   

   Don't click Edit on the ETP.

   

4. Complete the Description and the Date of payment fields.
   

   

5. Go the Employment Termination Payments tab.
6. The Related Payment ETP will not display the figures from the original ETP because the Tax benefits are per financial year and you are processing the payment in a new financial year from the original.
   Whatever payments are processed in a Related Payment ETP will be taxed as if they are an Original ETP.
   For example, same ETP thresholds apply.
   

   

7. Save and close the ETP.
8. Confirm the ETP.
9. Process the ETP in a manual pay.

Who isn't entitled to receive a genuine redundancy?

Employees over retirement age are not paid normal redundancy. Usually, the retirement age is set as 65.

These settings are under Administration > ETP Settings (see below).

How do I unconfirm an ETP?

1. On the employee’s ETP tab, click Edit.
2. Double click to open the ETP.
3. Click Edit.
4. Right click on the ETP and select Unconfirm ETP.
   

   

Why is the entire ETP being taxed when it's a redundancy?

This usually occurs when the Termination Reasons are not setup correctly. They need a termination type if the reason is redundancy, death, invalidity or early approved retirement.

See examples below:

You need to set:

• Qualify as Tax Free to Yes
• Excluded / Non-excluded Payment to Excluded.

How do I delete an ETP?

Before deleting an ETP, you have to unconfirm it. Then you need to make sure that there are no records on the Leave Credits tab. If there are, you need to delete them.

If you try to delete an ETP without confirming it, you'll see a message that says dependencies have been found.

To delete an ETP:

1. Click Save + Close but don't confirm the ETP.
2. Click on the ETP on the employee’s tab and delete it.
3. If the ETP has been processed in a pay, but the pay isn’t closed, you can still delete it. You need to delete the termination from Transaction View, then go to the employee’s ETP.
4. Edit and unconfirm.
5. On the Leave Credits tab, make sure there are no leave credit records.
6. Exit edit mode.
7. Go to the Payment Summaries tab.

8. If there is a record there, you can delete it.

   

   The ETP must not be in edit mode. If it is, the record will be reinstated when you save it.

   

9. Close the record and delete the ETP.

How do I pay more money on an ETP that's been processed?

It depends what year the ETP is from.

• If you're paying in the same year as the original ETP, add an ETP Adjustment.
• If the ETP was paid in a previous financial year, add a Related Payment.