(AUS) Terminating Employees in Australia

This chapter provides an overview of employee termination in Australia and discusses how to:

Create termination payments.
Print the ETP Calculations Worksheet.
Revise termination payment information.
Create timecards for termination payments.

Understanding Employee Termination in Australia

When employees are terminated from an Australian organization, they might receive a payment related to their termination. Depending on the circumstances of the termination, that employee might be eligible to receive an Employee Termination Payment (ETP). To determine whether an employee is eligible for an ETP and to determine the amount of that payment, several pieces of information and several complex calculations are required.

You can enter ETPs using either of these programs:

Employee Termination Entry (P75A0008)
Employee Termination Payments (P75A0010)

When you enter a termination payment using the P75A0008 program, the system automatically calculates all of the amounts that are associated with the payment, with the exception of the amounts that are associated with transitional agreements. When you enter a termination payment using the P75A0010, you manually calculate and enter all of the amounts for the ETP.

Note. Prior to July 1, 2007, when employees were terminated from an Australian organization, they might have received a payment related to their termination. Depending on the circumstances of the termination, that employee might have been eligible to receive an Eligible Termination Payment. For any terminations that occur on or after July 1, 2007, the term Eligible Termination Payment is no longer valid. The new term for this type of termination payment is Employment Termination Payment, or ETP.

The Australian Tax Office (ATO) mandates tax calculations that are used to create ETPs. These tax calculations can differ depending on these factors:

The reason for the termination.
The employee's length of service to the organization.
The payment method that is used for the ETP.
The types of earnings and payments that are included in the ETP.
Whether the employee has a transitional agreement.

The Australian Employee Termination Entry program simplifies the termination process by:

Automatically retrieving employee leave balances, including annual, sick, long service, and Rostered Day Off (RDO) leave, and if necessary, including those amounts in the ETP calculation.
Enabling you to enter Golden Handshake amounts when you create termination scenarios.
Automatically calculating the number of pre-1983 and post-1983 service days.
Automatically calculating the Post 94 Invalidity amount that is associated with the ETP.
Enabling you to enter payee details in the event of the employee's death.
Automatically calculating all tax amounts by using employee history information, tax setup information, and the information that you enter during the termination process.
Enabling you to override many of the values that are associated with the payment.
Enabling you to enter the amount of the payment that the employee wants in cash and the amount that the employee wants to roll into an approved fund.
Enabling you to enter transitional agreement information.

Along with entering actual termination information, you can also use the Australian Employee Termination Entry program to create model termination scenarios. You can enter model termination information for a given employee, calculate the amounts that are associated with the model termination, and create a worksheet for each scenario. You can then allow employees to review the information on these worksheets so that they can determine how they would like to receive their payment.

For example, due to the differences in tax calculations, an employee might find that rolling the entire amount of the payment into an approved fund is more advantageous than receiving a cash payment. Conversely, the employee might decide to take a portion of the payment as cash and to roll the remaining amount into an approved fund. The worksheet can assist the employee in making this decision.

Determining Whether the Termination Requires an ETP

The ATO mandates that some termination payments be made in the form of Eligible Termination Payments (ETP). For a termination to require an ETP, you must be able to answer yes toeitherof these questions:

Is the termination a Bona Fide Redundancy, as defined by the ATO?
Are any of the types of pay that are included in the employee's termination payment considered ETP-eligible, as defined by the ATO?

If the answer to either of these questions is yes, you must complete the ETP process for the employee termination. The ETP process includes these steps:

Entering ETP information.
Creating ETP worksheets for employee review.
Soliciting payment instructions from the employee, if necessary.
Creating ETP timecards.
Creating ETPs during the payroll cycle.
Creating ETP payment summaries and submitting them to the ATO.
Completing Reasonable Benefit Limit (RBL) forms for all ETPs over a specified amount, and submitting them to the ATO.
Storing appropriate records regarding ETPs to comply with ATO regulations.

If the termination does not require an ETP, but you are still distributing a termination payment to the employee, you can use the same process to produce regular termination payments. However, with regard to record keeping and reporting, regular termination payments are not regulated by the ATO. You can enter regular termination payments the same way that you enter ETPs.

Important! Oracle recommends that you use the Australian Employee Termination Entry program (P75A0008) to enter employee terminations that require ETPs. When you use this program to process terminations, the system creates the history records that are necessary to generate ETP payment summaries, which must be submitted to the ATO. If you manually create an ETP, you must manually calculate all tax information, as well as manually create an ETP Payment Summary.

If the termination does not require an ETP, you can enter the payment manually or use the Australian Employee Termination Entry program, because the tax calculations for a regular termination payment are far less complex than for an ETP. However, if you do enter the payment manually, you must calculate the tax amounts, employee leave balances, and payment amounts manually. Also, to ensure that employee history is updated correctly, you must use the appropriate payment, deduction, benefit, or accrual (PDBA) codes when entering manual termination payments.

Transitional Agreements

Beginning July 1, 2007, the ATO has created new tax regulations regarding the termination of employees who have transitional agreements. Transitional agreements are contractual terms and conditions that are associated with an employee’s termination.

Transitional arrangements may apply to ETP payments that are made between July 1, 2007 and June 30, 2012 if the terminated employee were entitled, as of May 9, 2006, to such a payment as specified by one or more of the following items:

A written contract.
An Australian or foreign law (or an instrument under such a law).
A workplace agreement under the Workplace Relations Act 1996.

The portion of an employee’s ETP that is associated with the transitional agreement is subject to specific tax calculations, which are defined by the ATO. Contact your local ATO office for additional information about the calculations and regulations that are associated with transitional agreements.

Note. You can use the P75A0008 to enter ETPs that include transitional agreement information. However, when you use this program, the system does not include any information about transitional agreements in the ETP. Therefore, after you create the ETP using the P75A0008 program, you must use the P75A0010 program to enter the transitional agreement information for the payment.

Is the termination a Bona Fide Redundancy?

All terminations that are considered Bona Fide Redundancies require ETPs. The ATO considers a termination to be a Bona Fide Redundancy if one of these criteria is met:

The employee will no longer be employed by the organization in any capacity.
The holding of an office is terminated.

If the termination does not meet either of these criteria, the termination is not considered a Bona Fide Redundancy and might not require an ETP. However, if the types of pay that are included in the termination payment are ETP-eligible, you must complete the ETP process.

For example, if an employee changes employment status from full-time to part-time, the ATO does not consider this a Bona Fide Redundancy, and therefore, no ETP calculations are required. However, if an employee is initially the manager of a bank, and then becomes a security guard at that same bank, the ATO considers this a Bona Fide Redundancy.

If you are uncertain about whether the termination is considered a Bona Fide Redundancy, contact the local ATO office for additional information.

Are the types of pay that are included in the employee's termination payment considered eligible ETP items?

If you have determined that the termination is a Bona Fide Redundancy, then you must complete the ETP process. However, if the termination is not considered a Bona Fide Redundancy, you might also need to complete the ETP process, depending on the type of pay that is included in the termination payment.

The ATO considers only certain types of pay eligible for ETP. If any portion of the employee's pay is considered eligible for ETP, regardless of whether the termination is a Bona Fide Redundancy, you must complete the ETP termination process. Types of pay that are typically considered eligible for ETP include, but are not limited to:

Unused RDO leave time.
Payments that are given to the employee in lieu of notice of termination.
Redundancy or bona fide payments.
Unused sick leave time.
Compensation for wrongful dismissal.

Employee termination payments might also include pay for items that are not considered eligible for ETP. If all of the payments that are included in the employee's termination payment fall under this category, you need not complete the ETP process. Types of pay that typically are not considered eligible for ETP include, but are not limited to:

Unused annual leave time.
Unused leave loading amounts.
Unused long service leave time.
Salary or wages that are owed to the employee for work already completed.

Note. The types of pay that are listed in the previous example are for illustrative purposes only and should not be used as a definitive list of eligible and ineligible ETP items. Contact the ATO for the most current information regarding ETPs to ensure that you calculate termination payments correctly.

Employee Payment Instructions

Depending on the amount of the ETP, you might need to solicit payment instructions from the employee whom you are terminating. Payment instructions are used to notify the organization about how the employee wants to receive payment. Employees can receive the ETP as a cash payment to roll the amount into an approved retirement fund, or receive a portion of the payment in cash and roll the remaining amount into an approved fund.

If the payment is less than the amount that is specified by the ATO, the organization is not required to solicit payment instructions from the employee. However, the organization can solicit this information and provide employees with an opportunity to decide how they want to receive their payment.

If the payment is over the amount that is specified by the ATO, you must solicit payment instructions from the employee, and you must also provide the employee with an explanation of the components of the ETP calculation. You can use the ETP Calculation Worksheet program (R75A0100) to create an ETP worksheet that the employee can use to review the details of the ETP.

When the employee gives you payment instructions, you might need to update the termination information that you initially entered into the system. For example, you might need to change the amounts that the employee takes as cash or rolls into an approved fund. Each time that you change an employee's termination information, you can create an updated ETP worksheet for the employee to review.

ATO Filing and Record Keeping Regulations

When you distribute ETPs to employees, you are required to submit information regarding those payments to the ATO. In addition, the ATO also requires that you store detailed records of termination payments.

If you distribute ETPs to employees, you must submit ETP payment summaries to the ATO along with the annual Pay As You Go (PAYG) tax filing information. If the cash portion of an ETP exceeds a certain amount, as specified by the ATO, you must also submit a Reasonable Benefit Limits (RBL) form. RBL forms should be filed monthly with the ATO.

In addition to submitting information to the ATO, the organization is also required to keep detailed records regarding termination payments.

Important! All of the information regarding ATO regulations for ETP filing and record keeping is believed to be current at the time of publication. However, due to periodic changes in tax regulations, you should contact the ATO for the most current regulatory information for ETP processing. Noncompliance with current tax regulations can result in fines to the organization.

Creating Termination Payments

This section provides an overview of termination payment creation, lists prerequisites, and discusses how to:

Enter termination payment information.
Enter transitional agreement information for ETP payments.
Set processing options for Australian Employee Termination Entry (P75A0008).

Understanding Termination Payment Creation

When employees are terminated from an Australian organization, they might receive a termination payment. Depending upon the circumstances of the termination, certain employees might be eligible to receive ETPs. You can create ETP and regular termination payments using either of these programs:

Employee Termination Entry (P75A0008)
Employee Termination Payments (P75A0010)

When you enter a termination payment using the P75A0008 program, the system automatically calculates all of the amounts that are associated with the payment, with the exception of the amounts that are associated with transitional agreements. When you enter a termination payment using the P75A0010 program, you manually calculate and enter all of the amounts for the ETP.

Using the P75A0008 program, you can process payments for redundancies, early retirement schemes, death, and invalidity scenarios. You can also create ETP worksheets for employees to review, and you can automatically generate timecards that the system uses to create actual termination payments. Alternatively, you can automatically create an interim payment for the termination. You must set the processing options of the P75A0008 program to specify that you want to create interims and you must specify a payroll ID for the interim header record. You can also use a selection from the Form menu during the termination entry process to review the selected employee's leave balances, such as their sick, vacation, and holiday leave.

You use the P75A0010 program to enter transitional agreement information for a termination, or to update existing termination payments with transitional agreement information.

When you enter termination information, you specify these items, which are used to determine the amount of the payment:

The reason for the termination.
Whether you will pay the employee for sick leave that has not been taken.
Whether you will pay the employee for long service leave that has not been taken.
The amount of any Golden Handshake payments that will be offered to the employee.
The amount of any payments that will be made in lieu of notice.
The amount of any Bona Fide payments that will be made for years of service to the organization.
Payee information, in the event of an employee's death.
Transitional agreement information.

After you enter all relevant termination information on the Employee Termination Pay form, you can use features of the Australian Employee Termination Entry program to automate these termination procedures:

Calculate the leave entitlements, tax amounts, and total payable amount.
Print a review worksheet, which includes all termination payment details, for the employee.
Create timecards that are used to create actual termination payments.

The Australian Employee Termination Entry program also enables you to create model termination scenarios. Because the tax calculations that are mandated by the ATO differ by termination reason, payment method, length of service, and types of payments that are included in the termination, model termination scenarios can help illustrate the differences in payment amounts for each scenario.

After you enter termination information into the system, whether it is factual or model information, you can create an ETP worksheet, which the employee can review. The employee can use this information to determine whether to receive the payment as cash, roll the amount into an approved retirement fund, or combine the two options.

You can create multiple termination scenarios for an employee; however, each termination scenario must have a unique termination date and termination reason combination.

For example, you can create a termination scenario for an employee who uses the termination date of May and a termination reason of redundancy. You can create another scenario for the same employee using the same termination date, but the termination reason must be different. Similarly, you can create multiple scenarios using the same termination reason, but with different termination dates.

If you want to review termination payment information for multiple scenarios, all of which use the same termination date and termination reason, you must enter the information for a scenario, print the ETP worksheet for that scenario, and then change the information to reflect a different scenario. You can print the ETP worksheet each time that you change the termination scenario, and then compare the ETP worksheets to determine the differences between the scenarios.

Entering a Termination

To create a termination payment, you must first enter termination payment information. You can use either of these programs to enter termination payments:

Employee Termination Entry (P75A0008)
Employee Termination Payments (P75A0010)

Note. Oracle recommends using the P75A0008 program to enter termination payments, this program automates the complex calculations that are required to accurately create a termination payment. Oracle recommends using the P75A0010 program to enter transitional agreement information for a termination, to update existing termination payments that were originally entered using the P75A0008 program, or to manually enter termination payments that do not require complicated calculations.

When you enter a termination payment, the system uses the information from the processing options, the termination payment information, tax information that you have set up in the system, and the employee's payment history to calculate leave entitlements, tax amounts, and the final amount of the payment.

You can enter ETP information as well as regular termination payment information using the Australian Employee Termination Entry program.

Processing Option Settings for P75A0008

The processing option settings for the Australian Employee Termination Entry program (P75A0008) are critical to ensure that employee termination pay is calculated according to ATO regulations. Specifically, you must carefully set up these processing options to ensure that the system correctly calculates termination pay:

Tab Name	Processing Option Number	Special Considerations
Defaults	1	Enter Y for this option if you want the system to automatically create an interim payment for the termination. If you enter Y for this option, you must also specify a payroll ID in option 10, and specify that you want to create an interim header record in option 11.
Defaults	7	Enter the PDBA code that you created to pay out any tax-free components, such as Lump Sum D. The PDBA that you enter here is used to calculate tax-free amounts for termination payments. If you do not enter the correct PDBA for this processing option, tax-free amounts are not considered when the system calculates termination payments; therefore, the payments might be inaccurate.
Defaults	8	Enter the statutory retirement age, as specified by the ATO. Because tax information periodically changes, you should contact the ATO to verify that this information is current.
Defaults	9	Enter the version of the Time Entry MBF processing Options program (P050002A) that you want to use when creating timecards for termination payments. This program controls many of the processes that the system uses to create and calculate timecard information. You should verify that the processing options that are associated with the version that you enter in this field are set correctly.
Defaults	10	Enter the interim payroll ID that you want the system to use when creating the timecards that are associated with terminations. You must enter an interim payroll ID to process the timecards through the Work With Interims Workbench. Because termination payments typically do not coincide with regularly scheduled payroll cycle processing, you might find that processing termination payments through the Work With Interims Workbench is easier and more convenient. If you enter a value for this processing option, you must also complete processing option 11 on this tab.
Defaults	11	If you enter an interim payroll ID in processing option 10, you must set this processing option to enable the creation of an interim payment record.
Defaults	12	Enter the maximum value of leave entitlement, as specified by the ATO, that can be taxed using a flat tax rate. Because tax information periodically changes, you should contact the ATO to verify that this information is current. If you enter a value in this processing option, you must also enter the associated tax rate in processing option 13 on this tab.
Defaults	13	Enter the flat rate of tax, as specified by the ATO, that the system uses to calculate tax amounts when leave entitlements are less than the maximum amount for flat rate tax, which is also specified by the ATO. For example, to enter a tax rate of 35.5 percent, enter 35.50 in this field. Because tax information can change periodically, you should contact the ATO to verify that this information is current.
Balance PDBA's	3	Enter the PDBA that the organization uses to track long service leave that was accrued prior to August 1978. This amount is known as the Band 1 amount. Because tax regulations changed in August of 1978, all long service leave that was accrued prior to that date requires a separate tax calculation to comply with ATO regulations.
Balance PDBA's	4	Enter the PDBA that the organization uses to track long service leave that was accrued between August 1978 and August 1993. This amount is known as the Band 2 amount. Due to changes in ATO tax regulations, a separate calculation is necessary to accurately calculate tax amounts for long service leave that was accrued during this period.
Balance PDBA's	5	Enter the PDBA code that you use to track the employee's total long service leave balance. This PDBA should include Band 1 and Band 2 amounts, along with any long service leave that was accrued since that time, which is considered Band 3.
Tax Area Tax Type	5	Enter the tax type that is used to tax amounts that are associated with approved early retirement, redundancy, or invalidity scenarios. Because tax information periodically changes, you should contact the ATO to verify that this information is current.
Tax Area Tax Type	6	Enter the tax type that is used to tax amounts that are associated with Band 3, or the Post 1993 component.
Tax Area Tax Type	7	Enter the tax type that is used to calculate the tax amounts for lump sum amounts. Currently, the tax rate for these amounts is 31.5 percent. Because tax information periodically changes, you should contact the ATO to verify that this information is current.
Tax Area Tax Type	8	Enter the tax type that is used to calculate the tax amount that is associated with normal resignations. This rate should reflect the current standard marginal rate. Because tax information periodically changes, you should contact the ATO to verify that this information is current.

Additional versions will be required for P75A0008 to cater to the different parts of the organization, for example, those that receive Leave Loading as part of the termination and those that don’t.

Prerequisites

Before you complete the tasks in this section:

Verify that the tax rules for termination processing have been set up correctly.

See these additional topics:

See (AUS) Setting Up Tax Calculation Options for Australia.
Verify that the user profile is set up as an Australian employee using the DMY date format. If the user profile is not set up correctly, you might receive Division by Zero errors during payment entry.

See JD Edwards EnterpriseOne Tools 8.98 Foundation Guide
Set all values in the processing options for the Australian Employee Termination Entry program (P75A0008).

See Setting Processing Options for Australian Employee Termination Entry (P75A0008).
Verify that these user-defined codes (UDCs) are set up correctly:
- Termination Type (75/T1)
- Payee Type (75/PT)
  
  See UDCs for Australia and New Zealand.
Verify that all PDBAs have been set up with the correct tax information.

See Setting Up Tax Information for PDBAs.
Enter a termination date for the employee.

Forms Used to Create Termination Payments

Form Name	FormID	Navigation	Usage
Work With Terminations	W75A0008A	Australia/New Zealand Inquiries (G07BUSP16), Employee Termination Entry	Access the termination payment forms.
Employee Termination Pay	W75A0008B	On Work With Terminations, click Add.	Enter termination payment information. Additionally, you can use selections from the Form menu on this form to review employee leave balances and to access interim entry. Interim entry is available only if you have set the processing options to create interim payments during termination entry.
Work With Employee Termination Payments	W75A0010A	Australia/New Zealand Inquiries (G07BUSP16), Employee Termination Payments	Search for and select existing ETPs that you want to update.
Employee Termination Payment Details	W75A0010C	On Work With Employee Termination Payments, click Add.	Enter ETP payments.
Employee Termination Payment Revisions	W75A0010B	On Work With Employee Termination Payments, select a record and then click Select.	Enter transitional agreement information for an ETP payment.

Entering Termination Payment Information

Access the Employee Termination Pay form.

To enter termination payment information:

Complete the basic information about the termination payment.
Select Retrieve Balances from the Form menu.
Select the Leave Entitlements tab and review the information.

The system uses the information that you entered in the processing options, along with employee history, to populate the fields on this tab.
To enable the fields in the Balance, Gross $, and Tax $ columns for entry, select the Enable Hours option in the header of the Employee Termination Pay form and make any necessary changes to the values on this tab.

When you enter values in the Balance column of the Leave Entitlements tab, the system calculates values in the associated field in the Gross $ column. You can override these calculated values if you select the Enable Hours option.
Review each tab on the Employee Termination Pay form to ensure that you have entered all necessary termination details, and then select Calculate Tax from the Form menu.

The system uses the information in the processing options, tax setup, and employee history and the values that you have entered on the Employee Termination Pay form to calculate all of the tax information for the termination payment.
Select the Summary tab to review summarized information about the payment calculations.
Select the ETP Calculation tab to review detailed information about the payment calculations.

After you verify that all the details are correct, the timecards containing all of the termination details need to be created.
Click Create Timecards.

This creates the timecards using the pay types as defined in the processing options.

Click OK to save the record.

Term Type	Enter the type of termination. This code is used to determine how the termination payment should be taxed, because different termination types have different taxation rules.
Date Term	Enter the date that the employee was terminated, if applicable. The date that you enter in this field is used to calculate the employee's age at the time of termination, the number of years of service to the organization, and the number of pre-July and post-July 1983 days that the employee has worked.
Payment Date	The date that you enter in this field is used to create the timecards that the system uses to generate the actual termination payment.
Sick Flag	Enter a code that indicates whether to include a monetary amount for unused sick leave balances in the payment amount. To include any unused sick leave that the employee has accrued, select this option.
LSL Flag (long service leave)	Select to include any unused long service leave that the employee has accrued.
Notice Period	Specify the number of weeks of payments in lieu of notice that you want to include in the payment.
Gross/ Week	Enter a value that indicates the standard, gross weekly pay that the employee receives. The system automatically calculates this amount using employee pay history. You can override this amount by entering a value in this field.
Gross Severance	Click the Calculator button next to the Gross Severance field, complete the calculation, and then click OK to calculate the amount of pay in lieu of notice that you want to include in the payment. The system populates this field when you click OK on the Calculator form.
Comp Years Of Service	Enter the number of years that an employee has worked for the organization. The system calculates the value in this field using the employee's start date and the date that you enter in the Term Date field.
Amount Paid Severance	Complete this field with the amount of pay for service length that you want to include in the payment.
Golden Handshake Amt	Enter the amount of any golden handshake payment that you want to include in the termination payment.
Payee Type	Enter a code that indicates the type of payee to which the payment is made. This field must be completed only if the termination is a death benefit payment. In cases in which an employee's termination payment is given to another employee, you must identify the type of payee. This information is used to determine the tax amount of the payment.
Tax File Number	Enter the employee's number.
Professional Title	Enter the professional title of a Who's Who person.
Given Name	Enter the first name of an individual. This field is informational only.
Middle Name	Enter the middle name or initial of an individual. This field is informational only. The name does not appear on any reports.
Surname	Enter the last name of an individual. This field is informational only.
Birth Date	Enter the employee's date of birth.
Address Line 1	Enter the first line of a mailing address for an employee, customer, or supplier in the Address Book system.
City	Enter a name that indicates the city that is associated with the address.
State	Enter a UDC (00/S) that specifies the state or province. This code is usually a postal service abbreviation.
Post Code	Enter the United States ZIP code or the postal code that specifies where a letter is routed. Attach this code to the address for delivery in other countries.

Entering Transitional Agreement Information for ETP Payments

Access the Employee Termination Payment Revisions form.

Employee and ETP Details tab

Non-Transitional Original or Amended Indicator

Select the type of nontransitional ETP payment you are revising. If you are revising a payment that has not yet been reported to the ATO, select Original. If you are revising a payment that has already been reported to the ATO, select Amended.

Transitional ETP Details tab

Previous Amount	Enter the amount of any transitional agreement termination payments that the employee has received during the transition period.
Golden Handshake Amount	Enter the amount of any transitional golden handshake payments that are made to the employee upon termination.
Payment in Lieu Amount	Enter the amount of any transitional payments in lieu that are made to the employee upon termination.
Transitional Amount	Enter the total amount of Transitional ETP to be given to the employee. For example, if the employee’s contract states that he is to receive 500.00 dollars upon termination, enter 500.00. This field does not include other amounts that are associated with the termination payment.
Directed Termination Payment (Tax Free)	Enter the amount of the transitional ETP that the employee is directing to an approved superannuation fund. This amount comes from the tax free component of the transitional ETP.
Directed Termination Payment (Taxable)	Enter the amount of the transitional ETP that the employee is directing to an approved superannuation fund. This amount comes from the taxable component of the transitional ETP.
Post June 94 Invalidity	Enter the amount of the post June 94 invalidity component.
Pre July 83 Days	Enter the number of transitional pre-July 83 days.
Pre July 83 Amount	Enter the pre July-83 amount.
Transitional Post June 83 Days	Enter the number of transitional post June-83 days.
Transitional Post June 83 Amount	Enter the transitional post June-83 amount.
Transitional Tax Deducted	Enter the amount of tax that is deducted on the portion of the transitional ETP that the employee takes in the form of a cash payment.
Transitional Net ETP	Enter the amount of the Transitional ETP, less rollover and tax amounts.
Transition Payment Indicator	Specify whether this payment meets the ATO requirements of a transitional payment. The payment summary programs use this value to determine whether to update the transitional payment field when creating payment summaries. Values are stored in UDC 75/TP, and include: Y: Yes, this is a transitional payment. N: No, this is not a transitional payment.
Trans Original or Amended Ind	Select the type of transitional ETP payment you are entering. If you are entering a payment that has not yet been reported to the ATO, select Original. If you are revising a payment that has already been reported to the ATO, select Amended. Note. This field is independent of the Non-Transitional Original or Amended Indicator on the Employee and ETP Details tab.
Process to ATO	Specify whether to write the termination record to the EMPDUPE file. Values are stored in UDC 75/SA and include: 0: Do not process to ATO. Select to include the ETP in the EMPDUPE file. 1: Process to ATO. Select to exclude the ETP from the EMPDUPE file.

Setting Processing Options for Australian Employee Termination Entry (P75A0008)

Processing options enable you to specify the default processing for programs and reports.

Defaults

1. Create payment on interim. (Y/N)	Specify whether the system creates a payment on interim. If you enter Y for this option, you must also enter values for options 10 and 11 on this tab.
2. Number of years before pro-rata is included.	Specify the number of years before pro rata is included.
3. Enter the number of hours for a standard work day.	Specify the number of hours for a standard workday.
4. Enter the lump sum tax free threshold for bona-fide redundancy payments.	Specify the lump sum, tax-free threshold for bona-fide redundancy payments.
5. Enter the tax free amount per year of service.	Specify the tax-free amount per year of service.
6. Enter the low rate threshold amount.	Specify the low rate threshold amount.
7. Enter the pay type for Bona Fide redundancy payments (Tax Free).	Specify the pay type for bona-fide redundancy payments (Tax Free).
8. What is the age for Normal Retirement.	Specify the age for normal retirement.
9. Time Entry MBF Version.	Specify the Time Entry MBF version. If you leave this processing option blank, the system uses the default version.
10. Enter a Payroll ID to use when creating an Interim Header Record for Redundancy Processing.	Specify a payroll ID to use when creating an interim header record for redundancy processing.
11. Create an Interim Header Record for Redundancy Processing.	Specify whether the system creates an interim header record for redundancy processing. Values are: 1: Create 0: Do not create
12. Enter the maximum value of leave entitlements to be taxed at flat rate ( for example $300).	Specify the maximum value of leave entitlements to be taxed at flat rate (for example, 300 AUD).
13. Enter the flat rate of tax where leave entitlements are less than the maximum value for flat rate tax.	Specify the flat rate of tax for which leave entitlements are less than the maximum value for flat rate tax.

Balance PDBA's

1. Enter the Annual Leave DBA that holds the employee balance.	Specify the annual leave DBA that holds the employee balance.
2. Enter the Sick Leave DBA that holds the employee balance.	Specify the sick leave DBA that holds the employee balance.
3. Enter the DBA that holds the Balance for Long Service Leave accrued during Band 1.	Specify the DBA that holds the balance for long service leave accrued during Band 1.
4. Enter the DBA that holds the Balance for Long Service Leave accrued during Band 2.	Specify the DBA that holds the balance for long service leave accrued during Band 2.
5. Enter the DBA that holds the Balance for Long Service Leave accrued during Band 3.	Specify the DBA that holds the balance for long service leave accrued during Band 3.
6. Enter the DBA that holds the Balance for Long Service Leave accrued during Band 4.	Specify the DBA that holds the balance for long service leave accrued during Band 4.
7. Enter the RDO DBA that holds the employee balance.	Specify the RDO DBA that holds the employee balance.
8. Enter the Leave Loading Percentage. (nn.nnnn)	Specify the leave loading percentage. (nn.nnnn)
9. Include Accrued Leave in Leave loading calculation.	Specify whether the system includes accrued leave in leave loading calculation. Values are: 1: Do not include 0: Include

Tax Area Tax Type

1. Enter the Tax Type for Normal Tax.	Specify the tax type for normal tax.
2. Enter the Tax Type for ETP Tax.	Specify the tax type for ETP tax.
3. Enter the Tax Type for Band 1 Tax.	Specify the tax type for Band 1 tax.
4. Enter the Tax Type for Band 2 Tax.	Specify the tax type for Band 2 tax.
5. Enter the Tax Type for Band 3 Redundancy, Approved Early Retirement or Invalidity.	Specify the tax type for Band 3 redundancy, approved early retirement, or invalidity.
6. Enter the Tax Type for Band 3 Tax. All other cases.	Specify the tax type for Band 3 tax.
7. Enter the Tax Type for Lump Sum.	Specify the tax type for lump sum.
8. Enter the Tax Type for Resignation.	Specify the tax type for resignation.

Normal

1. Enter the pay type to be used to pay out the unused Annual Leave Balance.	Specify the pay type to use to pay out the unused annual leave balance.
2. Enter the pay type to be used to pay out the unused Annual Leave Loading.	Specify the pay type to use to pay out the unused annual leave loading.
3. Enter the pay type to use when paying out unused LSL from Band 1.	Specify the pay type to use when paying out unused long service leave (LSL) from Band 1.
4. Enter the pay type to use when paying out unused LSL from Band 2.	Specify the pay type to use when paying out unused LSL from Band 2.
5. Enter the pay type to use when paying out unused LSL from Band 3.	Specify the pay type to use when paying out unused LSL from Band 3.
6. Enter the pay type to use when paying out unused LSL from Band 4.	Specify the pay type to use when paying out unused LSL from Band 4.
7. Enter the pay type to use when paying out the assessable ETP where the employee is under Normal Retirement Age.	Specify the pay type to use when paying out the assessable ETP when the employee is under normal retirement age.
8. Enter the pay type to use when paying out the assessable ETP where the employee is over Normal Retirement Age and assessable amount is under the threshold amount.	Specify the pay type to use when paying out the assessable ETP when the employee is over normal retirement age and assessable amount is under the threshold amount.
9. Enter the pay type to use when paying out the assessable ETP where the employee is over Normal Retirement Age and assessable amount is over the threshold amount.	Specify the pay type to use when paying out the assessable ETP when the employee is over normal retirement age and assessable amount is over the threshold amount.
10. Enter the pay type to use when paying out the Pre 1/7/83 component of ETP (non taxed).	Specify the pay type to use when paying out the pre-1/7/83 component of ETP (nontaxed).

Redundancy

1. Enter the pay type to be used to pay out the unused Annual Leave Balance.	Specify the pay type to use to pay out the unused annual leave balance.
2. Enter the pay type to be used to pay out the unused Annual Leave Loading.	Specify the pay type to use to pay out the unused Annual Leave loading.
3. Enter the pay type to use when paying out unused LSL from Band 1. through 6. Enter the pay type to use when paying out unused LSL from Band 4.	Specify the pay type to use when paying out unused LSL from Band 1 through LSL from Band 4.
7. Enter the pay type to use when paying out the assessable ETP where the employee is under Normal Retirement Age.	Specify the pay type to use when paying out the assessable ETP when the employee is under normal retirement age.
8. Enter the pay type to use when paying out the assessable ETP where the employee is over Normal Retirement Age	Specify the pay type to use when paying out the assessable ETP when the employee is over normal retirement age.

Disability

1. Enter the pay type to be used to pay out the unused Annual Leave Balance.	Specify the pay type to use to pay out the unused annual leave balance.
2. Enter the pay type to be used to pay out the unused Annual Leave Loading.	Specify the pay type to use to pay out the unused annual leave loading.
3. Enter the pay type to use when paying out unused LSL from Band 1. through 6. Enter the pay type to use when paying out unused LSL from Band 4.	Specify the pay type to use when paying out unused LSL from Band 1 through LSL from Band 4.
7. Enter the pay type to use when paying out assessable ETP.	Specify the pay type to use when paying out assessable ETP.
8. Enter the pay type to use when paying out Post June 94 invalidity component.	Specify the pay type to use when paying out post-June 94 invalidity component.

Death

1. Enter the pay type to be used to pay out the unused Annual Leave Balance.	Specify the pay type to use to pay out the unused annual leave balance.
2. Enter the pay type to be used to pay out the unused Annual Leave Loading.	Specify the pay type to use to pay out the unused annual leave loading.
3. Enter the pay type to use when paying out unused LSL from Band 1. through 6. Enter the pay type to use when paying out unused LSL from Band 4.	Specify the pay type to use when paying out unused LSL from Band 1 through LSL from Band 4.
7. Enter the pay type to use when paying out assessable ETP where paid to a dependent/trustee.	Specify the pay type to use when paying out assessable ETP when paid to a nondependent or trustee.
8. Enter the pay type to use when paying out assessable ETP where paid to a non dependent/trustee.	Specify the pay type to use when paying out assessable ETP when paid to a nondependent or trustee.

Printing the ETP Calculations Worksheet

This section provides an overview of the ETP Calculations Worksheet and discusses how to:

Print the ETP Calculations Worksheet.
Set processing options for ETP Calculations Worksheet (R75A0100).

Understanding the ETP Calculations Worksheet

After you enter termination payment information, you can print the ETP Calculations Worksheet. This worksheet includes all of the details that are associated with the termination. Employees can use this worksheet to determine how they want to be paid. Depending upon the amount of the payment, employees can receive the payment in these ways:

In cash.
As funds rolled into an approved retirement fund.
A combination of cash and funds rolled into an approved retirement fund.

Form Used to Print the ETP Calculations Worksheet

Form Name	FormID	Navigation	Usage
Work With Terminations	W75A0008A	Australia/New Zealand Inquiries (G07BUSP16), Employee Termination Entry. Select Print Worksheet from the Row menu.	Select an employee.

Form Name

FormID

Navigation

Usage

Work With Terminations

W75A0008A

Australia/New Zealand Inquiries (G07BUSP16), Employee Termination Entry.

Select Print Worksheet from the Row menu.

Select an employee.

Printing the ETP Calculations Worksheet

Access the Report Output Destination form.

Setting Processing Options for ETP Calculations Worksheet (R75A0100)

Processing options enable you to specify the default processing for programs and reports.

Defaults

1. Enter the Lump Sum Tax Free Threshold for Bona-fide Redundancy Payments	Specify the lump-sum, tax-free threshold for bona fide redundancy payments.
2. Enter the Tax Free Amount per year of Service	Specify the tax-free amount per year of service.

Revising Termination Payment Information

This section provides an overview of termination revisions and discusses how to revise termination payment information.

Understanding Termination Revisions

After you enter termination payment information and allow employees to review the ETP Calculations Worksheet associated with their termination, you might need to revise the termination information.

For example, after reviewing the details of the termination, an employee might decide to take only a portion of the payment in cash and roll the remaining amount of the payment into an approved fund. If the payment instructions that the employee selects differ from those that were entered with the initial termination payment information, you must revise that information before you create the actual payment, because changes to payment instructions can affect the tax calculations for the payment.

You can revise termination payment information as many times as necessary to ensure that the payment is correct.

Form Used to Revise Termination Payment Information

Form Name	FormID	Navigation	Usage
Employee Termination Pay	W75A0008A	Australia/New Zealand Inquiries (G07BUSP16), Employee Termination Entry	Revise termination payment information.

Revising Termination Payment Information

Access the Employee Termination Pay form.

Make any necessary revisions to the termination information, and then select Calculate Tax from the Form menu. Continue this process until the payment is revised correctly, and then click OK to save the record.

Creating Timecards for Termination Payments

This section provides an overview of timecard creation and discusses how to create timecards for termination payments.

Understanding Timecard Creation

After you have finalized the details of an employee's termination, you can create timecards that the system uses to generate the actual payment. You can use the Australian Employee Termination Entry program to automatically generate timecards for the termination payment. You do so to ensure that:

The timecards use the correct pay types.
The system accurately calculates taxes on termination payments such as lump sum amounts.

After you generate these timecards, you can review and revise them until they include all of the information that is necessary to create the payment.

Note. Oracle strongly recommends that you generate timecards for termination payments using the Australian Employee Termination Entry program. Using this program ensures that all of the elements of a termination payment are correctly taxed. Manually entering timecards for termination payments can result in inaccurate tax calculations.

After you create the timecards for the termination payment, you can process them through a payroll cycle to create the actual payment for the employee.

Forms Used to Create Timecards for Termination Payments

Form Name	FormID	Navigation	Usage
Work With Terminations	W75A0008A	Australia/New Zealand Inquiries (G07BUSP16), Employee Termination Entry	Access forms to enter and review termination payments.
Employee Termination Pay	W75A0008B	Select a record on the Work With Terminations form and click Select.	Create timecards for termination payments. Also use this form to: Review or update existing termination payments. Create termination timecards.
Work With Time Entry by Individual	W051121A	On the Employee Termination Pay form, select Time Entry from the Form menu.	Review timecards for a termination payment.

Creating Timecards for Termination Payments

Access the Employee Termination Pay form.

Select Create Timecard from the Form menu. The system generates the timecards and returns to the Work With Terminations form. You might accidentally or deliberately delete termination records. If these are deleted, unpaid timecards will also be deleted.