Terminate an employee with an previous date

[bellagee]

How terminate an employee in February 2020 - pay accrued leave - post June ATO payroll submit pre 20/21 payroll finalisation

[Emily_B]

Hello @bellagee 

As I understand your desired series of events, you need to enter a termination date for an employee in February 2020, pay out their termination payments like Accrued Leave, and you want to enter this after June 2020 payroll dates but before finalising THIS financial year of 2020/2021?

To my knowledge, if an employee has a termination date of February 2020 that would need to be recorded in EOFY 2019/2020 finalisation. If you could explain a little more about the scenario I would be happy to provide more assistance, but I'd first like to clarify a few points:

• It sounds like the employee was terminated but the termination wasn't actually entered back in February. When did the employee actually stop working - as in in, when did they stop receiving pays from you?
• Is your 2019/2020 year finalised via STP and submitted to the ATO?

Please let me know the above as well as a bit more info about the situation.

[bellagee · Accepted solution]

The employee terminated in February 2020.  However, at the time I made him inactive.  He didnt return and so I should have terminated him at the end of February 2020 and paid out his accrued leave.  I processed the pay for employees for June 2020. and submitted by monthly STP report for the June 2020 payroll to ATO.   I have yet to process my finalisation to close out pay for 2019/20 so emploiyees can access their summaries through ATO. I was hoping I could still terminate the employee in 2019/20 and process the annual leave as a correction in 2019/2020 and submit a firther payroll or something similar before I commence the finalisation process for 2019/20 .  Not sure if this is possible or right thing to do. Hope I have explained myself enough.  

[Emily_B]

Hello @bellagee 

Thank you for clarifying, I believe I understand your scenario better now. You'll first want to follow the steps outlined in this Help Article: Terminating an employee through STP. In your case specifically, you will need to first make the employee active again. You'll also want to refer to this Help Article on Processing a final pay, which will assist you in paying out the unused leave. Note that when you terminate the employee, you will need to enter the February 2020 date as the termination date, as that lets the ATO know that they ceased employement with you back then and that they should not expect any more paychecks for this employee from your business.

Do ensure that you process any of the above for the terminated employee in a separate payrun just for him. If any other figures gets sent through for other employees, it will alter their YTD figures in STP. As a final step if you do see any other employees' figures change, you may need to process a $0 pay run for everybody else dated 30/06/20, which will prompt STP to have the most updated YTD figures for the entire 19/20 financial year. 

Once that employee is terminated and his unused leave paid out, you should be able to continue with finalising the year as per the instructions in this Help Article: End of year finalisation with Single Touch Payroll.