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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