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      <div class="WebWorks_Breadcrumbs" style="text-align: left;">
        <a class="WebWorks_Breadcrumb_Link" href="payroll.9.1.htm#1088919">Paying your employees</a> &gt; <a class="WebWorks_Breadcrumb_Link" href="payroll.9.25.htm#1088919">Processing termination payments</a> &gt; Task&nbsp;3:&nbsp;Create payroll categories for termination payments</div>
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      <blockquote>
        <div class="hms_StepModuleHeading">Task&nbsp;3:&nbsp;<a name="1088919">Create payroll categories for </a>termination payments</div>
        <div class="b_Body"><a name="1202698">Termination payments are normally taxed at different rates and </a>may not accrue superannuation.</div>
        <div class="bnF_NoteHeadingFirst">
          <span class="N_007eNoteCautionWarning">note : </span><a name="1202713">Calculations required to make employment termination </a>payments</div>
        <div class="bnL_NoteBodyLast"><a name="1202714">Consult your accountant or visit the ATO at </a><span class="l_Link"><a href="http://www.ato.gov.au/businesses" target="_window">ato.gov.au/businesses</a></span> for advice on how to calculate ETP and bona fide redundancy payments. </div>
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                  <span style="color: Gray;">■</span>
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                <div class="bb_Bulleted_inner"><a name="1202700">If the employee whose services you are terminating is entitled </a>to a redundancy payment, you may need to pay an employment termination payment (ETP) and a bona fide redundancy payment. You will need to set up payroll categories for these payments, such as ETP and ETP tax. </div>
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                <div class="bb_Bulleted_inner"><a name="1107737">If the employee you are terminating has unused holiday pay, </a>you will need to create a wage category for unused holiday pay if one does not already exist.</div>
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        <div class="hp_ProcedureHeading" onclick="WebWorks_ToggleDIV(WebWorksRootPath, &quot;wwdd1107738&quot;);">
          <span class="N_007eProcBullet"></span><a name="1107738">To create a termination payroll category</a><script type="text/javascript" language="JavaScript1.2">WebWorks_WriteArrow(WebWorksRootPath, "wwdd1107738", false);</script></div>
        <script type="text/javascript" language="JavaScript1.2">WebWorks_WriteDIVOpen("wwdd1107738", false);</script>
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                  <span class="N_007eStepNum">1	</span>
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                <div class="bs_BodyStep_inner"><a name="1107739">Go to the </a><span class="w_Widgets">Payroll</span> command centre and click <span class="w_Widgets">Payroll </span><span class="w_Widgets">Categories</span>. The <span class="w_Widgets">Payroll Category List</span> window appears.</div>
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                  <span class="N_007eStepNum">2	</span>
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                <div class="bs_BodyStep_inner"><a name="1088931">Click the </a><span class="w_Widgets">Wages</span> tab.</div>
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                  <span class="N_007eStepNum">3	</span>
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                <div class="bs_BodyStep_inner"><a name="1088932">Click </a><span class="w_Widgets">New</span>. The <span class="w_Widgets">Wages Information</span> window appears.</div>
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                  <span class="N_007eStepNum">4	</span>
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                <div class="bs_BodyStep_inner"><a name="1088934">Type the name of the wage category in the </a><span class="w_Widgets">Wages Name </span>field. For example, if you need to create a wage category for unused holiday pay, use a name such as Unused Holiday Pay.</div>
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                  <span class="N_007eStepNum">5	</span>
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                <div class="bs_BodyStep_inner"><a name="1088935">Choose the type of wages</a>—<span class="w_Widgets">Salary</span> or <span class="w_Widgets">Hourly</span>—according to the type of payment: <span class="w_Widgets">Hourly</span> for unused holiday pay, <span class="w_Widgets">Salary</span> for ETP amounts, etc.</div>
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                  <span class="N_007eStepNum">6	</span>
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              <td width="100%">
                <div class="bs_BodyStep_inner"><a name="1088943">Click </a><span class="w_Widgets">Employee</span>. The <span class="w_Widgets">Linked Employee</span> window appears.</div>
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                  <span class="N_007eStepNum">7	</span>
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                <div class="bs_BodyStep_inner"><a name="1088947">In the select column (</a><img id="1203824" class="Default" src="images/payroll.9.28.2.png" width="23" height="23" style="display: inline; float: none; left: 0.0; text-align: left; top: 0.0;" />), click next to the employee who is leaving.</div>
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                  <span class="N_007eStepNum">8	</span>
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                <div class="bs_BodyStep_inner"><a name="1088951">Click </a><span class="w_Widgets">OK</span> and then <span class="w_Widgets">OK</span> again. The <span class="w_Widgets">Payroll Category List</span> window reappears with the new payroll category in the list.</div>
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                  <span class="N_007eStepNum">9	</span>
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                <div class="bs_BodyStep_inner"><a name="1088953">If you are creating a payroll category to pay an entitlement </a>balance (such as unused holiday leave), and the payroll category used to accrue the entitlement is set up to calculate leave based on a percentage of gross hours, you need to exclude the new payroll category from the entitlement accrual calculation.</div>
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                  <span class="N_007eSubStep">a	</span>
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                <div class="bss_BodySubStep_inner"><a name="1088954">Click the </a><span class="w_Widgets">Entitlements</span> tab. The list of entitlement payroll categories appears.</div>
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                  <span class="N_007eSubStep">b	</span>
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                <div class="bss_BodySubStep_inner"><a name="1088955">Select the payroll category used to calculate the accrual, </a>for example, Holiday Entitlement, and click <span class="w_Widgets">Edit</span>. The <span class="w_Widgets">Entitlements Information </span>window appears.</div>
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                  <span class="N_007eSubStep">c	</span>
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                <div class="bss_BodySubStep_inner"><a name="1088956">Click </a><span class="w_Widgets">Exempt</span>. The <span class="w_Widgets">Entitlements Exemptions</span> window appears.</div>
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                  <span class="N_007eSubStep">d	</span>
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                <div class="bss_BodySubStep_inner"><a name="1088960">In the select column (</a><img id="1203848" class="Default" src="images/payroll.9.28.3.png" width="23" height="23" style="display: inline; float: none; left: 0.0; text-align: left; top: 0.0;" />), click next to the payroll category name to exclude any hours entered for this payroll category from being included in the entitlement accrual calculation.</div>
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                  <span class="N_007eSubStep">e	</span>
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              <td width="100%">
                <div class="bss_BodySubStep_inner"><a name="1088972">Click </a><span class="w_Widgets">OK </span>and then <span class="w_Widgets">OK</span> again. The <span class="w_Widgets">Payroll Category List</span> window reappears.</div>
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                  <span class="N_007eStepNum">10	</span>
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                <div class="bs_BodyStep_inner"><a name="1088976">Repeat from </a><span class="l_Link"><a href="#1088931">step&nbsp;2</a></span> for each required termination payroll category.</div>
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        <div class="href_ReferenceBlockHeading"><a name="1207061">Related Topics</a></div>
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                  <span style="color: Gray;">■</span>
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                <div class="bbi_BulletedIndented_inner"><span class="l_Link"><a href="payroll.9.29.htm#1088978" name="1207065">Task&nbsp;4:&nbsp;Exclude termination payroll categories from superannuation calculation</a></span></div>
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                  <span style="color: Gray;">■</span>
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                <div class="bbi_BulletedIndented_inner"><span class="l_Link"><a href="payroll.9.25.htm#1088821" name="1207069">Processing termination payments</a></span></div>
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