Terminating An Employee

This article will outline the two different methods of terminating an employee in Wagemaster.

1. Via the Termination Wizard at Wages Processing (Terminating Permanently).
2. Temporary Termination via manually entering a terminate date in the employee file.

Termination Wizard

The Termination Wizard should be used if the employee is to be paid out un-used leave entitlements or other termination/lump sum termination payments. The termination wizard is designed to assist with the calculation of the gross and tax on these types of termination items. The wizard will also allow Wagemaster to record the amounts per ATO reporting requirements. An employee file that is terminated via the Termination Wizard cannot be reinstated. If the employee were to return, you would need to add a new employee file for the employee. 

If you do not need to pay out any unused leave on termination or any other termination components to the exiting employee you may wish to use the temporary termination method. The temporary termination method is particularly useful for terminating employees that are:

• Casual employees that have no ETP or lump sum items to be paid out upon termination.
• Employees that are likely to return and have no ETP or lump sum items to be paid out upon termination.
• Employees on long periods of unpaid leave.

Using the Temporary Termination method ie. Manually entering a termination date in the employee files means that:

• The employee can be easily reinstated when/should they return to work.
• The employee card will not take up an active employee licence while the termination date is present in their employee file.

Method 1: Permanently Terminating An Employee

When one of your staff leaves and is unlikely to return, (moved to another country, got a new job, etc.) you will hire a replacement staff member. You will need the licence that was being used by the old employee. To do this, you will need to permanently terminate your employee. 

All terminations of this nature should be completed in Wagemaster on the day of actual termination, i.e. the date the employee leaves the company, where possible.

1. Check annual leave entitlements and long service leave entitlements prior to termination. 
2. Access the timesheet for the relevant employee. 
3. Complete the timesheet if necessary to calculate the employee’s final pay.
4. Click Next to progress to the Adjustments screen. 
5. Make any relevant adjustments as per normal. 
6. Click on Termination. 
7. Click on Add. 
8. The Termination Wizard will appear. 
   
9. Click on Next. 
10. Type the Termination Date of employment as the last day the employee worked for you (this is especially important if you are not processing the termination on the day the employee left).
11. This example will look at a standard termination. If you are unaware of which termination type to choose, you may need to seek assistance from your accountant.
12. Click Next. 
13. You will now be on the Termination Notice screen. The notice required will vary depending on the type of employee. At this stage, you must select if sufficient notice has been given and if not who did not give notice. Once you have selected an option click Next. 
    • Please Note: 
      You may be required to pay termination notice if you did not give sufficient notice of termination to your employee.
14. You will now be on the Annual Leave screen, ensure the details are correct, and then click Next.
15. You will now be taken to the Long Service Leave screen. If relevant, please check these details before clicking Next. 
16. You must now select a method to tax your employee’s annual and long service leave payouts. You should read the methods and decide which one you will use then click Next.
17. You will now be on the Rollover screen; click Next.
18. You will now be on the Summary Screen, click Finish.
19. A termination record will be created.
20. Click on Next to carry through to the payslip. 
21. The payslip produced will specify any amounts to be paid to the employee and will also state the date of termination. 
22. Click Save then Close.

Please Note:
If you permanently terminate an employee and they do return, they will get a new employee number and, if they return within the same financial year they will also end up with 2 payment summaries.

 

Method 2: Temporarily Terminating An Employee

When one of your casual staff goes away for a few months and is likely to come back you may need to use their licence in the meantime for a different person. To do this you will need to temporarily terminate your absent casual. 

1. Go to Employee. 
2. Go to Edit Employee. 
   
   
3. Select the Employee (who you wish to temporality terminate) from the dropdown list. 
4. Click on Employment, then Employment again. 
5. Enter the first day of the first pay period from which they will be absent in the terminate box. 
6. Type a user-defined Reason for the Temporary Termination.
7. Click Close to save your changes. 
   
   To confirm you have successfully terminated the employee go to Employee > Edit Employee > Select the employee, you will notice the Person Icon (Employment Status Icon)to the left of the Employee's Name is now greyed out. The top/title of the Employee Detail window will have the word Terminated in brackets.

 

Reinstate A Temporarily Terminated Employee

For any employee that has a Terminate date field that is active (Date is present but the field is NOT greyed out), the employee was terminated using the Temporary Termination method outlined above. An employee terminated using that method can be reinstated upon their return to work. When your casual returns to assist with work, you will need to reinstate them. To do so, follow the instructions below:

Ensure that you reinstate the employee prior to processing their first pay after they have returned.

1. Go to Employee. 
2. Go to Edit Employee. 
3. Select the Employee you wish to reinstate from the dropdown list. 
4. Click on Employment, then Employment again. 
5. Delete the date in the terminate box. 
6. Type a Reason if desired. 
7. Click Close to save your changes. The employee icon will no longer be greyed out.

When reinstating an employee we would always recommend you run the Report > Employee > Details Report and have the employee review their details and advise payroll\HR of any updates required such as bank or address details. If the employee is attached to an award that has been configured with yearly leave accruals.

 

Note On Active Employee Licenses In Your Wagemaster Company File

Terminated employees do not count towards the active licenses of the Wagemaster payroll database. This means you can set employees that do not work regularly to be terminated and utilize the active employee licence for another employee. This may save you from purchasing additional active licenses if you have a large casual workforce that does not work each pay cycle.

 

Please note: If you have paid an employment termination payment (ETP) to a worker you must give them a PAYG payment summary - employment termination payment (NAT 70868) within 14 days of making the payment.