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"


  • 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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