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. This is sometimes referred to as a ‘termination payment’. You don’t need to pay them for unused personal leave. If the employee is also owed pay up to their termination date, process an additional pay for this.To make a termination payment for unused leave, just Before paying an employee's termination payment, change their leave accrual setup to ensure leave doesn't accrue on their final pay. To do this, go to the Payroll menu and choose Employees. Select the employee then click the Leave tab. Under Annual leave, change the employee's Annual entitlement to 0.00 (regardless of whether the leave is based on weeks or hrs/year). Then click Save. Image Added
You can now do a pay run for the employee being terminated to pay them any unused leave. Make sure the number of hours worked is zero, and enter their available annual leave balance (shown next to the Hours field for annual leave) into the Annual leave field.
You'll also need to make sure any superannuation amounts are removed as super is not accrued on unused leave. Once you’ve done this, process the pay run as usual. The termination payment will be calculated automatically, based on the normal pay rate. You will also need to provide the employee with a PAYG payment summary. |