Question
Terminate the employment for employee Samson Worth based on the below information: Samson Worth was notified that his employment will be terminated on 14/04/2021 The
- Terminate the employment for employee Samson Worth based on the below information:
- Samson Worth was notified that his employment will be terminated on 14/04/2021
- The company no longer requires an employee for his position due to the installation of new technology.
- Samson Worth started his employment with Little Pear Group on 18/10/2010
- He works 20 hours per week and is under the preservation age
- All unused annual leaves, personal/carer's leave and any eligible long service leave should be paid out
- As part of the termination agreement any time in lieu owing should not be paid out.
- The company will also pay Samson a $70,000 redundancy settlement.
- In gratitude for his service the company will also pay a $20,000 golden handshake.
- The last pay run covers the week between 8/4/2021 and 14/04/2021 and will be paid on 15/04/2021.
- Business settings > Opening Balances > Initial financial year must be set to FY2020/2021
- What type of employment termination is this?
| Rebundancy |
- Using your Payroll practice system process the last pay run for Samson Worth and copy a (readable screen shot) of the pay slip and paste it in the answer box below. In the box below, include the file name you used for the payslip. Redundancy
- Manually calculate Samson's final pay to confirm the figures are correct.
Prepare the information to process the employment termination payment, by filling in the following tables (show your workings). Ensure compliance and termination procedures are being followed.
| Workings | Answer | |
| Final weeks' pay | $ 1942.31 | |
| Unused Annual Leave | $ 2480.17 | |
| Unused LSL | $ 14,424.88 | |
| Unused personal/carers leave | $ 1579.99 | |
| Redundancy settlement | $ 70,000 | |
| Golden Handshake | $ 20,000 | |
| Total | $ 110,427.35 |
Calculate the tax-free component of the redundancy settlement
| Workings | Answer | |
| $ | ||
| $ |
Applying the ETP caps: Genuine Redundancy
| Workings | Answer | |
| Whole-of-income cap | $ | |
| ETP cap |
Applying the ETP caps: Gratuity
| Workings | Answer | |
| Whole-of-income cap | $ | |
| ETP cap | $ |
Withholding amounts
| Workings | Answer | |
| Concessional tax | $ | |
| Non-concessional tax | $ | |
| Total tax | $ |
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Financial Accounting Information For Decisions
Authors: Robert w Ingram, Thomas L Albright
6th Edition
9780324313413, 324672705, 324313411, 978-0324672701
