How to Process the final pay on the death of an employee

Jocelyn

Good Afternoon

We have had an employee pass away a few months ago. We have finally heard from the Estate and now have the bank account details we need to pay.

I have 37.50hrs of pay owing from work completed before death.

I have 103.12 hours of annual leave owing.

No personal leave.

I have been instructed by our HR that no ETP is required.

How do I process this? Is it two separate payments and what do I do about super?

I have searched in here and there is instructions from years ago on how to do it in Payroll Premier. I don't quite follow it.

We use Reckon Accounts Premier Edition 2022.

TIA

Acctd4

Hi Jocelyn

Earnings (including unused leave accrued) pre-death are tax exempt. Super is payable on the hours worked but not on the unused annual leave.

Payments applicable after death may be considered a "Death Benefit" ETP which the estate pays tax on. However if paid specifically to a trustee, this is usually also tax exempt. Again, no super is payable on unused leave.

The ATO has some detailed info on it here: https://www.ato.gov.au/Individuals/Jobs-and-employment-types/In-detail/Termination-payments/Recipients-of-death-benefit-termination-payments/?page=1#Payment_to_the_trustee_of_a_deceased_estate

Feel free to get in touch with me direct if you get stuck 😊