Christmas can be a time of change for many employees. It can also often coincide with an end of fixed term employment.
So what are the things you need to be mindful of at this busy time of year if you are having to process a termination pay?
If you have an employee terminating at Christmas and they have outstanding annual leave, depending on the amount of leave owing, they may also be owed for public holidays as part of their termination pay calculations.
Another really important part of terminating your employee is to ensure the annual leave rate is correct. If there have been any changes to employee pay rates or working profiles over the previous 52 weeks, an employee review is highly recommended.
Not all payroll systems will tax a termination pay as a lump sum payment as per the IRD guidelines, so there may be a requirement to manually override the PAYE.
Also remember that if you are paying allowances as part of the termination pay, that these should be correctly set up for KiwiSaver, PAYE and Gross Earnings purposes.
If you think your payroll system could do with a health check, please give Kerryn a call 0211802255.