Final pay for employee

We have a full-time employee (apprentice) who will finish work with us just before Christmas. I can't find a procedure listed anywhere as to how to prepare his final pay. (If anyone knows of one, feel free to point me to it!)

In addition to his final hours worked/allowances, I will need to pay out his unused RDOs and annual leave.

Usually, he would be paid with the other employees as part of the weekly scheduled pay run. Do I still do this for his final hours worked/allowances, and then later use the "Terminate Employee" button within the employees' records to somehow do the payouts for RDOs and AL? Or should I pay the other employees separately, and then use the Terminate Employee button to handle everything for this apprentice's last pay? (I don't really know what that Terminate Employee button does as I have never used it before, and can't really try it out without terminating an employee).

Does the Terminate Employee button handle all of the Eligibile Termination Payment (ETP) requirements for the ATO? (Or is there information I need to know/enter manually)?

Is the Release Date the last day the employee actually works, or the first day after that? (I'm thinking of how it calculates accruals here; it will have to calculate accruals for every hour worked including on that last day).

Any guidance appreciated.

Sandra

Answers

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,395 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited December 2022

    Hi Sandra

    You can do either - put it all on the final Paycheque (final hours worked + entitlements) or create a separate Paycheque for the entitlements & you can pay him with everyone else or process it separately. NOTE: If you process it separately on a different date though, you will need to lodge an additional STP for it as it will have it's own separate Pay Run date in the dropdown list. (It's fine to do that, just need to remember that)

    The Terminate Employee button just guides you through the process eg you enter in the last date worked, termination date & any Redundancy info (if applicable, so not in your case) & this automatically completes those sections within the employee record, including the Release (aka "Termination") Date.

    Have all the entitlements been setup & tracked automatically within the program eg Can you see how many hours you need to pay out for RDOs & Annual Leave ? If not, that will need to be worked out manually first.

    The Release Date can't be earlier than the last Paycheque Date as it is determined as the latter of the last day the employee either works or gets paid eg if an employee has worked 01/12/22 - 07/12/22 & you date their final Paycheque as 09/12/22, their release date has to be no earlier than 9th (The system will tell you this anyway if you enter an earlier date)

    Only the unused RDOs payment would be shown on an ETP, unused AL is always taxed at marginal rates/shown on the standard income statement - usually just under Gross Payments - unless it's accrued pre-1993. In your case, it sounds like the employee is young so there won't be any Lump Sum labels to set up for the unused leave.

    ETPs can be a little tricky - You need to set up specific Payroll Items that are mapped to the correct ETP labels in order for them to report correctly.

    The Help files within the program are very detailed & can be accessed in numerous ways - Each window has an Ask box where you can enter a specific question relating to that window. This takes you to the Help section on that topic. Next to that is also a How Do I? dropdown containing common question that people have in that particular window:


    In addition, you can also open the Help section directly via the Help dropdown:



    You can use either the Index or type directly in the Search tab:



    If you have a read of the info there on terminating employees & ETPs, that will provide you with very detailed steps/info. If you get stuck or feel you need some 1-on-1assistance, feel free to email me direct 😊

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    shaz@accounted4.com.au

    https://accounted4.com.au

    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • Sandra_10124565
    Sandra_10124565 Member Posts: 33

    Thanks Shaz - that helps to point me in the right direction. I'll see how it goes!