Before You Start
Before you terminate an employee, you will need to:
- ensure that all their Active Jobs are set with a Finish Date and,
- set the Termination Date and Reason in their user profile.
- include any outstanding timesheets and expenses and process them through Process Payroll. Processing this before the employee’s termination pay will ensure that their totals (eg leave accruals) are up to date.
In Australian portals, you'll also need to ensure that your Termination Reasons have been configured correctly. as employees will need to be assigned a Termination Reason as part of their termination.
The classification of a Termination Reason is sent via STP and provides the information required by Services Australia (Centrelink) to ensure that they pay terminated employees the correct amount from the outset, replacing the need for a separation certificate.
Create a Termination Pay Item
If you haven’t created pay items for the purpose of processing terminations, these will need to be set up and used in the termination pay run to record the amounts being paid out.
For example, if an employee has an annual leave balance to be paid out on termination, you might set up a pay item called ‘Annual Leave on Termination’.
The pay items that you use will vary depending on the nature of the termination, so you’ll need to confirm whether you require extra items (eg payment in lieu of notice, long service leave).
You will also need to ensure that when you configure the termination pay items that you enter a name that easily identifies it as a termination pay item and tick the ‘This item is exempt from Leave Accrual’ checkbox.
Pay items won’t need to be created each time you process a termination pay. Only create new pay items if the settings need to be different from your existing ones.
Employees may have leave entitlements that need to be paid out as part of their termination pay. These will automatically be reduced if you select the Item Type in the termination lump sum pay as 'Leave', so as long as you set this Item Type and select the correct Leave Item, you won't need to manually record and adjust any balances.
Manually Adjust Leave Balances
You may have circumstances where you need to manually adjust a leave balance. To do this:
Go to Users > Employees > select the employee > Leave.
Record each balance outside of Astute so that you can add the amounts to the termination pay.
Click the Edit button for each leave category.
Enter the New Balance value as 0.00 to clear the outstanding balance.
Click Apply Changes.
When the balance adjustment is saved, it will be included in the leave reports as a record that the balance has been manually adjusted.