When an employee finishes working for you, you need to pay them the balance of the annual leave they’ve accrued but not yet used. You don’t need to pay them for unused personal leave, such as sick leave.

If the final pay is includes an employment termination payment (ETP), such as a payment in lieu of notice, redundancy, or a 'golden handshake", it's handled differently to other final payments.

For all the details, see Processing a final pay and Processing an employment termination payment (ETP).

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's how:

1. Go to the Payroll menu and choose Single Touch Payroll reporting.
2. Click the Employee terminations tab
3. For the terminated employee, enter or choose their Employee end date.
4. Click Notify the ATO.
5. Enter your name as the authorised declarer and click Send.

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

This step lets the ATO know that you won't be paying the employee again this payroll year. You can finalise the terminated employee now, or when you complete your STP finalisation at the end of the payroll year. See End of year finalisation with Single Touch Payroll reporting

Processing a final pay

Processing an employment termination payment (ETP)

Removing an employee termination