FOR

Intermediate-level payroll practitioners (or advanced practitioners wanting a refresher) who process all areas of an employee’s termination pay.

Important point: This course is not suited to someone new to payroll or in an entry-level payroll position.

PURPOSE

There are two critical points in an employee’s lifecycle that payroll must get right: when an employee starts employment and when their employment ends.

For payroll, it is essential to fully understand the reason for termination, as this determines how the final pay is processed. Termination pay is a business-critical activity with substantial risk to the organisation if calculated incorrectly—and it has a direct and immediate impact on the employee.

This course provides payroll practitioners with the knowledge required to assess and understand how their payroll system calculates termination pay, based on compliance with legislation and best practices.

Participants will receive a comprehensive manual with fully worked examples and references, and will complete a range of termination pay calculation exercises.

COURSE CONTENT

Reason for termination & legal factors

• Resignation
• Redundancy
• Disciplinary
• Retirement
• Abandonment of employment
• Not returning from parental leave
• Long-term sickness (incapacity)
• Not returning to work from ACC
• Death
• Frustration of contract

Standard termination employment agreement clauses

• Termination clause
• Notice period
• Redundancy compensation
• When a final pay will be paid

Additional special agreed terms:

• Garden leave
• Bonding agreement

Legislative payments made as part of a termination pay

• Minimum wage
• Holidays Act 2003
  • Terminating before 12 months
  • Terminating after 12 months
  • Extending leave on termination regarding upcoming public holidays
  • Alternative holidays
  • How ACC affects annual holidays on termination
• Parental Leave and Employment Protection Act
• The employee not returning from parental leave
• The employee returning from parental leave and then terminating
• When leave must be paid in a termination pay (Holidays Act)
• Extra pay
  • Exit inducement payments
  • Restrictive covenant payments
• Personal grievance payments

Common agreed payments included in a termination pay

• Notice
  • Working notice
  • Payment in lieu of notice
  • Extending notice
• Bonus and commission payments
• Long service leave
• TOIL
• Additional agreed annual leave
• Redundancy compensation
• Retirement allowance
• Reimbursing allowances

Deductions from a termination pay

Wages Protection Act 1983:

• Payments owed to the employer
• Overpayments to be recovered

Government deductions and how they apply to a termination pay:

• Child support
• Student loan
• MSD deductions
• Court fines
• IRD 157 notices
• Payments included or excluded for KiwiSaver contributions in a final pay
• Payments that do not have ACC earner levy deducted in a termination pay

Tax treatment for payments made on termination

• How and when different types of payments are taxed in a termination pay
• How leave payments on termination are taxed
• Payments taxed as extra pay (lump sum payments)

Termination documentation

• Employee resignation letter
• Termination checklist
• Final timesheet
• Final payslip
• Records that must be kept

Final pay exercise

• A series of practical exercises covering a wide range of final pay scenarios

LEARNING OUTCOMES

At the end of the course, participants will be able to:

• Understand the different termination scenarios payroll must process and the legal factors involved
• Explain the differences between legislative and agreed payments
• Calculate what is payable, what deductions apply, and what documentation is required
• Calculate a wide range of termination pay scenarios confidently and accurately

On completion of the course, attendees will receive a Certificate of Attendance.

NZPPA CERTIFICATION

This course, in part, will support completion of the online assessment requirements for NZPPA Certification, required to become a recognised payroll professional.

CANCELLATIONS – TRANSFERS – REFUNDS

We require ten clear business days’ notice of cancellation to allow for a full refund or transfer to another course. Registrations cancelled with less than ten business days’ notice will only be eligible for a transfer or refund in accordance with NZPPA policy. Substitute participants are always welcome.