How do i terminate an employee in Reckon Accounts Hosted

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Employee has resigned. Running Reckon Accounts Hosted 2017 R2...can find Reckon Accounts Business 2013 (?updated 2015) guide via the Reckon Community. Is this still current? All the ATO links are void. Is there a current Hosted step-by-step guide available?
Employee wants to be paid owed AL weekly until runs out, as he says the tax will be too high with a lump sum. I can't understand what I'm suppose to do in this situation with ETP via ATO website (is there a different tax rate/etc?). Am I allow to do this? As AL accrues when on AL, do I disable this feature to process his pays until used? He's our only FT employee & disabling won't affect anyone else.
Thank you in advance for any advice or direction.
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Leisha S

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Posted 1 year ago

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Pam

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Hi Leisha best you seek advice on this as
1.  If the employee gets another job whilst being paid annual leave from leaving your employ, they wont be paying enough tax across the board, and will look for someone to blame for having a tax bill at year end.  
2.  There are strict rules around tax on termination for that very reason, I suggest if you are a member of a bookkeeping association or industry association to contact them, or then Fairwork if you are in a Pty Ltd organisation, or the ATO - anyone of those to get some proper advise on the % to withold on the type of termination, and how.   
The employee really doesnt get a choice in the matter of how much tax is taken on termination.  
The software can only advice how to set up once you know which type and how much tax.  
Hope this helps a bit
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Linda Putland, Accredited Partner

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Further to Pam's comments, if you agree to have them "take the leave" instead of paying it out as a lump sum on termination - they could come back and say you should be paying super on it... whereas there is no super on a lump sum "unused annual leave" payment.  The formula for calculating tax on lump sums should mean they don't pay more tax than necessary anyway?  its all going to be in this financial year - so I think safer for the employer to pay it correctly...
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Kevin Russell, Accredited Partner

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Linda there are rules for what payments constitute an ETP. And there are special rules for unused annual leave. It is NOT usually taxed concessionally. This is why I recommend anyone to get factual advice from an impeccable source. This list is not sufficient
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Linda Putland, Accredited Partner

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Hi Kevin - I never said that unused annual leave was taxed concessionally and I never said it was an ETP - I agree neither of these conditions apply... but calculating the correct tax on a lump sum payment of unused leave would effectively have similar tax deducted to annual leave paid over a number of weeks.  I do agree that getting some advice if unsure is a good first step for Leisha.
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Kevin Russell, Accredited Partner

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You should be ringing fair work about this. None of us are lawyers and I dont want to see you in the frame if the employee gets nasty. This is not the place for anyone to be interpreting awards. Its nout our job.
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Kevin Russell, Accredited Partner

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And if you look for Shedule 7 on the ATO website all the payment types are set out along with their tax treatment.
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Leisha S

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Thank you all for your input. None of this is my qualification, so I'll be sure to get some professional advice. Obviously I want to do it the correct way, for everyone. I'll check out Schedule 7 via ATO site - thanks Kevin!