Enhancements to ETP Type O payments in KeyPay

ETP Type O Payments

An Employment Termination Payment (ETP) is a payment received by an employee because their employment was terminated. Whether an employee receives an ETP depends on what the termination pay is made up of, and whether any of those payment types fall into the ETP classification.

What is defined as an ETP?

  • You can work out which payments to include in the employee’s ETP by checking the ATO website.
  • ETPs are broken down into codes and treated differently for tax purposes. A description of each ETP code can be found here.

Improvements to ETP Type O payments

As per the ETP code list, examples of ETP Type O payments could be golden handshake, gratuity, payment in lieu of notice, payment for unused sick leave, or payment for unused rostered days off.

KeyPay has significantly improved how ETP Type O payments are processed in the pay run, including:

  • Selecting whether the payment is superable, whereby the system will then automatically calculate the SG component, and
  • Automatically classifying unused leave paid out as ‘Type O’, and taxing it according to the ATO’s ETP guidelines.

These enhancements will be available from 17 March 2020, and will:

  • Ensure compliance when it comes to processing Type O ETPs as part of termination pay;
  • Improve the automation of classifying ETPs to remove manual errors;
  • Ensure that if a user is unfamiliar with the complicated topic of ETPs, they won’t have to worry, because KeyPay will correctly classify and calculate it for them without their intervention.

For more details on how these improvements will work in practice, check out our support article.

Kate Brown

Marketing Manager at KeyPay

You might also like...

3 air stewardesses walking in an airport towards the tarmac and a plane. They are wearing blue dresses, and are each pulling along a suitcase behind them.
November 3, 2021

Group 3 modern award pay rates have now been increased

In line with Fair Work's 2.5% increase to the national minimum wage and awards, KeyPay has now updated our Group 3 modern award pay rates.
A woman sits at a desk and is typing on a computer keyboard with one, and holding up a piece of paper to read. There is a pen between her fingers, as well as a clipboard and a computer mouse on the desk that she is sitting at.
October 28, 2021

Maximise efficiency by bulk importing Employee Advanced Standard Hours

Our new Advanced Standard Hours feature saves time by allowing you to bulk import employees' hours, using an advanced importer to match data without errors.
A person's hand is seen holding a pen and writing on a piece of paper, whilst they are sitting at a table. There is a Mac laptop on the left side of the photo, and there is a glass containing a liquid beverage in the background of the photo. There is a KeyPay logo in the top left corner of the photo.
September 27, 2021

Save time through splitting earnings by location!

From next week, payroll administrators will now be able to automate the distribution of earnings across different locations.
Automation illustration

Not using KeyPay yet?

Try it free for 30 days

Learn more