When an employee leaves your business, you'll need to process their final pay. This will include their regular pay (up to their last day of work) and their unused annual leave.
Depending on the employee's workplace agreement and their reason for leaving, there may also be other payments you’ll need to finalise, like:
unused long service leave
an employment termination payment (ETP), like in lieu of notice. If you need to include an ETP in a final pay, you'll need to complete some additional steps. To find out if a payment is defined as an ETP, check the ATO website.
You'll also need to report the employee's termination to the ATO through your STP reporting.
Rules, tax and other complexities
Final pays can get complicated so we recommend you speak to an accounting advisor about the specifics of your final pay.