The following guide will explain the options available to you when processing an employee through a "Redundancy / Early Retirement" through ClockOn. This wizard is an extension of the Payroll Wizard and can only be accessed form this point, for a full list of guides on how to process payroll please refer to the following link Processing Payroll.
For information on how to access this wizard within payroll please refer to the following document Step 4 - Completing Terminations Using the Wizard.
NOTE: The . It is the Administrator’s responsibilities to determine which options are required, that the values are correct and that all statutory regulations are complied with. Final responsibility for the correctness of this calculation rests with the Administrator and not with ClockOn.
- Step 1 – Reason for Termination: The ClockOn Payroll Wizard may be used to terminate employees under either “normal”, “redundancy/retirement” or "in the event of an employee death" conditions. For advice on the correct choice, consult with your industrial relations adviser or accountant. Once you have selected the required option, Click on Next >
- Step 2 – Payout of Statutory Annual Leave and Additional Annual Leave: The Administrator can choose to pay out statutory annual leave and additional annual leave owing. The Administrator will need to know if statutory annual leave or additional annual leave owing is pre 18 August 1993 or Post 17 August 1993. All leave owing will appear (by default) in the Post 17 August 1993 category. If the Administrator places any hours in the Pre 18 August 1993 category, these hours will automatically be deducted from the Post 17 August 1993 Hours category. Once you have selected the required options, Click on Next >
- Step 3 – Payout of Special Annual Leave and Leave Loading: The Administrator can choose to pay out Special Annual Leave owing. The Administrator will need to know if special annual leave owing is pre 18 August 1993 or post 17 August 1993. All leave owing will appear (by default) in the Post 17 August 1993 category. If the Administrator assigns any hours to the Pre 18 August 1993 category, these hours will automatically be deducted from the Post 17 August 1993 hours category. The Administrator can also select Payout Loading on Annual Leave Owing. There is an additional category for a tax free amount. Usually, the first $320 is a tax free amount. Once you have selected the required options, Click on Next >
- Step 4 – Payout of Personal Leave, Time-in-Lieu & RDO Leave: The Administrator can choose to pay out personal leave, time in lieu and RDO leave owing. Check the buttons provided to pay out any of these forms of leave. If paying out time in lieu owing, note that some federal and state awards require the employee to be paid out at the original overtime rate. Once you have selected the required options, Click on Next >
- Step 5 – Payout of Long Service Leave: The Administrator can choose to pay out long service leave owing. This screen provides the employee’s Start Date and Termination Date and the completed years of service. As with Annual Leave, all Long Service Leave owing will appear by default in the Post 17 August 1993 field. For long-term employees the Administrator can, however, enter amounts for pre 16 August 1978 and 16 Aug 1978 – 17 August 1993, separately. Amounts entered into these categories will be automatically deducted from the Post 17 August 1993 field. Next >
Step 6 - Redundancy/Early Retirement Payments: This step provides the Administrator with the option to enter the Weeks per Year of service and the employees Standard weekly wage (which is added automatically by looking at the employees pay rate and Working hours) that is required to calculate the redundancy pay. If required you can also edit the total amount and tax free threshold. The Defaults button will clear all of the information you have entered on this step.
NOTE: In this example the employee is entitled to 12 week of redundancy pay and as they have completed 12 years of service then the weeks per year has been entered as 1. Weeks per year can be entered as a decimal if required however the figure will show as the nearest whole number while the calculation will be done at the decimal.
The ATO provides information in regards to the calculation for the Tax Free Threshold for Termination Payments at
For a listing of the current payment limits for the Tax Free Threshold please use the link below
Fair Work does offer some advise on this: https://www.fairwork.gov.au/ending-employment/redundancy/redundancy-pay-and-entitlements
- Step 7 - Payment in Lieu of Notice: This step provides the Administrator with the option to make a in lieu of notice payment for the employee. For this step the employees Standard Weekly Wage will be entered from the previous step, you will need to enter the Weeks to payout. The Defaults button will clear all of the information you have entered on this step. Click on Next >
- Step 8 - Calculation of Tax on Termination Payout: This step provides the Administrator with the calculation of tax on termination payout. The Administrator has the flexibility to change two fields on the screen. The field Total Tax Payable can be adjusted. Under Marginal Tax Calculation, the yearly amount for estimated salary or wage can also be adjusted. This field represents the salary/wage earned YTD which can be found in Employee Setup, Pay tab, YTD button. If you need to revert back to the original calculations then you can click on the Defaults Once you are happy with the amounts, Click on Next >
- Step 9 – Employment Termination Payments: If the employee is eligible for an employment Termination Payment (ETP), this step displays the field (highlighted below) where this payment can be entered. Once you have entered the required amounts, If applicable, click on Next >
The Termination Completed screen allows the administrator to Preview or Print all Termination information, so the calculation can be verified externally before being finalised. When completed, select the Finish button to terminate the employee.
Once Completed you will be taken back to the Termination Page and you will be able to see which employee you have run through the termination wizard or have selected to postpone their termination. Click on Next to move to the next step of the payroll wizard