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.

If the final pay 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 (STP) reporting, you need to notify the ATO of the termination. This lets the ATO know the employee's termination date, the reason, and any ETP components in their final pay.

Here's how:

1. Go to the Payroll menu and choose the Payroll menu > Single Touch Payroll reporting.
2. Click the the Employee terminationstab tab.
3. For the terminated employee, enter or choose their Employee end date.
4. Click Choose the applicable Payroll year and click Add Termination.
5. Enter the termination details and click Notify the ATO.
   Enter your name as the authorised declarer and click Image Added
6. When prompted to send your payroll information to the ATO, enter your details 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 STP reports, and it can take up to 72 hours to be accepted by the ATO. You can check the status of the report in the STP reporting centre.

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