Creating a Termination Pay

We recommend paying terminated employees before processing normal pays for other employees. This ensures that terminated employees are correctly marked as inactive when you create pays for their pay group in the future.

Before processing a termination

  • Complete or cancel any others pays the employee is in before doing the termination pay run.
  • Make sure there's only one entitlement for each leave type for that employee. When terminating an employee, the system processes only one entitlement for each leave type. If an employee has more than one entitlement for a leave type, use the Entitlement Adjustment screen (MP.PP.30.00) to consolidate the balances of all of them into one before processing the termination.
  • Configure the employee's pay group and rates. If the employee belongs to multiple pay groups, check that the pay group being used for the termination has the correct rates configured on the Pay Groups tab of the Pay Details screen (MP.PP.23.10).
  • (New Zealand only) Import public holidays and set up schedules for notional public holidays.

Create a termination pay run

You need to follow these steps before opening the Termination window. If you already have the window open, close it until completing these steps. This helps ensure the terminated employee's final pay is calculated correctly.

  1. Enter any leave the terminated employee is taking in the final pay period.
  2. Create a pay run as normal and go to the Pay Run Details form (MP.PP.31.20).
    Note: If their final pay day differs to their normal pay day, create a one-off pay instead, as per the instructions in the next section.
  3. On the toolbar, click the three dots icon (. . .)and import all necessary pay data: Import Leave, Import Timesheets and Import Public Holidays.
  4. Open the Employee's Current Pay form (MP.PP.31.30) for the employee being terminated.
  5. If the employee is not working for a full pay period, reduce or delete any pay items that got copied from their normal payments.
  6. If necessary, add any additional pay items, like redundancy payments, retirement payments or payments in lieu of notice, etc. However, exclude any contractual leave described in the employee's agreements.

If the final pay day differs from normal, create a one-off pay run

If the date for the employee's final physical pay day differs to their normal date:

  1. Create a one-off pay run for the terminated employee under the regular pay group.
  2. Use the same pay period start and end dates, but change the physical pay day. By default, all pay items set in the standard pay are automatically copied in the one-off pay run.
  3. Remove other employees from the pay run.
  4. To avoid paying the terminated employee twice, remove them from the normal pay run in which the termination date falls.

Calculate termination payments

After creating a pay run, you're ready to calculate the employee's termination payments. The process differs depending on region: