Terminating an employee in Accounts Business 2013 and later

Legacy KB ID: 5025

Question

What steps do I need to take to terminate an employee in Accounts Business and pay all termination entitlements, include ETP payments? 

 

Answer

Please see our guide here on the detailed instruction on terminating an employee in Reckon Account Business/ Accounts Hosted.

Taxation treatment of the various termination payroll items are different to the normal PAYG tax rates,  so users must take particular care in applying termination payroll items to employees.  In general, there are two types of termination payments:

1.    Items appearing on the Individual Non-Business Payment Summary as Lump Sum payments:

a.    Payout of Unused Annual Leave

b.    Payout of Unused Long Service Leave

c.    Tax Free component of a genuine redundancy

d.    Reimbursement or expenses incurred in previous years

2.    Additional items to appear on the Eligible Termination Payment (ETP) Payment Summary:

a.    All other payments not included in 1 above.

Depending on the combination of payroll items used, you may need to give the employee two Payment Summaries – the INB Payment Summary for normal pay items and the ETP Payment Summary for additional eligible termination payroll items.


Please note that applicable tax rates may change from year to year. 

For 2014/15 and 2015/16 the tax rates are:

1.    Post June1983 Untaxed Element (low rate threshold) – (R) and (O)

·         15.0% for employees older than their Preservation Age

·         Plus 2.0% Medicare Levy (previously 1.5%)

·         Total:  17%

2.    Post June1983 Untaxed Element – (R) and (O)

·         30.0% for employees older than their Preservation Age

·         Plus 2.0% Medicare Levy (previously 1.5%)

·         Total:  32%

3.    Post June1983 Untaxed Element – (R) and (O) – (for amounts above the ETP Cap or above the Whole of Income Cap)

·         45.0%

·         Plus 2.0% Medicare Levy (previously 1.5%)

·         Plus 2.0% Budget Repair Levy (introduced 2014/15 for 3 years)

·         Total:  49%

 Need more help?

Ask the Reckon Community at: https://community.reckon.com/reckon.

 


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