Processing Option Settings for Employee Termination Entry Program (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 31.5 percent 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.