STP code for an ETP payment to an employee

Denise Durant

Good morning,

We have an employee who is to receive 10 weeks of standard pay as part of a termination payout that has been negotiated with the employer. What STP code should I use to classify this payment?

Denise

Acctd4

Hi Denise

This would be Post June 1983 Untaxed Element (O) 😊

(NOTE: This payment would be considered an ex gratia, gift or golden handshake so is not classed as OTE & therefore no Super - or Leave accruals - would apply)

Kris_Williams

Untaxed element! Does that mean there is no tax deducted from the pay?

Acctd4

@Kris_Williams No, the terminology is a little misleading - It's still classed as a "Taxable Component" but - up to the relevant ETP threshold - is taxed at either 17% or 32%, depending on the employee's age 😬

Kris_Williams

thanks Shaz I may have to enter one of these in the coming weeks

Denise Durant

Many thanks for your advice Shaz. I have processed the ETP and it seemed to work out OK.

Denise🙂

Acctd4

Great to hear @Denise Durant ! 👏🏻👏🏻