Institute of Certified Bookkeepers
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ETP and Unused Leave

  • Member in Practice
  • Practice Certificate
  • 10 posts
  • # 117911

Hi,

Can you tell me whether I should make 3 seperate payments for an employee who is to be terminated: - 1, her normal fortnightly pay, 2, Payment in lieu (ETP) and 3, Unused leave.  Or should I included her unused leave in her normal fortnightly pay in which case she would end up paying more tax.

Many thanks for any advice.

Bev

  • 36 posts
  • # 117912

Hi Bev,

Some systems allow you to edit the tax so you could pay her wage, ETP and leave in a single payrun, then change the tax.

Depending on what the limitations of your software is, it could be easier just to make 3 separate payruns.

Each method should be fine as long as the employee is not taxed too heavily.

Some systems also require the ETPs are standalone so the tax can be reported separately in the STP submission, which is something you may also wish to consider.

 

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