Step-by-Step Instructions

1. Open the Employee’s Pay Record

• Go to Payroll > Pay Runs.
• Open the relevant pay run.
• Click on the employee’s name to open their pay record.

2. Add the Leave on Termination Pay Item

If the Pay Item Already Exists:

• ‍Click Add Pay Item.
• Select  Leave on Termination from the list.
• Click Add.

If You Need to Create the Pay Item:

• ‍Click Add Pay Item, then click New Pay Item (top-left).
• Enter:
  • Name : eg. "Leave on termination"
  • Payment Type : Select unused leave on termination‍
• ‍Click Save.
• Select the new pay item and click Add.

3. Enter Leave Payment Details

• Click the pencil icon next to the pay item to edit.
• In Qty/Hours, enter the total leave hours to be paid out.
• In Rate, enter the employee’s hourly rate.
• Click Save.

4. Review Leave Balance Update

Once saved:

• The leave balance table will show the hours taken in the Taken column.
• The closing leave balance will reduce accordingly.
• The payment will appear on the employee’s payslip and in the STP report under the correct category.

5. (Optional) Override Tax Amount

If you need to manually adjust the calculated tax:

• Click Edit Tax and Super.
• In the Tax and Super field, enter the requeired tax and super amount.
• Click Update to save the changes.

Tips:

• Ensure the pay item is correctly classified as Unused Leave on Termination to report accurately to the ATO.
• Always double-check the tax treatment for termination payments with your accountant or adviser.

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