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.

• Golden Handshake

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.