The term 'employment termination payment' (ETP), is any payment that is made in consequence of the termination of a person’s employment.
To report the Employee Termination Payment, you need to set up the payment type under payroll settings.
Step 1 - Click on "Settings" > "Payroll" > "Earnings" > "Add New"
Step 2 - Select "Employee Termination Payments"
Step 3 - Add the "ETP Name"
Step 4 - Select the ETP Type "Type R" or "Type O"
Note:
Check the box "Is Taxable" if the ETP payment is taxable.
Check the box "Show in Payslip" if you wish to show the ETP Type payment in pay slips
Step 5 - Click on "Create"
Below is the video for your reference:
The two ETP codes of Type R and Type O are summarised below:
Refer to this article on - How to add termination payments in a pay run?
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