The following guide will explain the options available to you when processing an employee through a "Termination Due to Death" through ClockOn. This wizard is an extension of the Payroll Wizard and can only be accessed from 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 Termination Wizard is designed to act as a guide only. 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. Final payment figures produced via the Termination Wizard should be independently verified.
The first page of the termination Wizard provided the Administration the Disclaimer that "The wizard assists in determining the amount to be paid on the termination to the selected employee. It is the users’ responsibility to determine which options are required, that the values are correct, and that all statutory regulations have been complied with. If in doubt, please check with your accountant or other authority.”Click on Next >
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 >
The Termination because of death option presents the following options
- Death benefit ETP paid to a dependent of the deceased
- Death benefit ETP paid to a non-dependent of the deceased
- Death benefit ETP paid to a trustee of the deceased
Each option has tax implications for any ETP payments made to the employee for example the ETP payments made to a dependent are excluded from tax until the ETP cap is reached whereas ETP payments made to a non-dependent are taxed throughout and payments made to a trustee or estate are excluded from tax for ETP purposes.
For more information on the tax rates for termination payments please follow the ATO link.
Aside from the tax implications selecting a relevant option will set termination type which will be displayed on the termination, ETP, and PAYG reports and will be submitted with your STP submissions to the ATO, the types are listed as follows;
D - Payments made to a dependent.
N - Payments made to a non-dependent.
T - Payments made to a trustee or estate.
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. Click on Next >
Step 6 - Payment in Lieu of Notice: This step provides the Administrator with the option to make an in lieu of notice payment for the employee. For this step, you will need to enter the employee's Standard Weekly Wage and the Weeks to payout. The Defaults button will clear all of the information you have entered on this step. Click on Next >
Step 7 – Calculation of Tax on Termination Payout: This step provides the Administrator with the calculation of tax on termination payout. While ClockOn will automatically calculate the employee's termination tax based on the current marginal rates, the Administrator has the flexibility to adjust the amount of tax that the employee is to pay within the termination, this is done by adjusting the Total Tax Payable field as shown below.
In conjunction with this, Under Marginal Tax Calculation, we also include a calculator to assist the user with differences if they wish to adjust this amount, the yearly amount for estimated salary or wage can also be adjusted and the system will provide a new total yearly tax value for the employee based on this amount.
Please note that the estimated values are linked to the employee's set up in regard to their rate of pay/salary as well as their working week setup. If you believe that these values are incorrect you will need to close the payroll and double-check the employee's setup.
For more information for the marginal tax calculation please refer to the ATO's documentation.
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 8 – 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 finalized. When completed, select the Finish button to terminate the employee.
Once completed the Termination Wizard will return you back to the payroll.