Payments made on termination
When your employees leave your business, they can be paid several types of 'lump sums' that are taxed and reported differently to normal income. These may include:
- employment termination payments
- unused leave payments
- tax-free and genuine redundancy payments.
Fringe benefits tax (FBT)
If you've provided an employee with fringe benefits and they are leaving your business, you'll need to:
- calculate your FBT provided to your employees, and
- include it in your FBT return at the end of each FBT year (1 April to 31 March).
Super guarantee
You'll need to calculate and pay super guarantee on any final salary and wage payments that form part of your employee's:
- ordinary time earnings for quarterly periods up to 30 June 2026
- qualifying earnings from 1 July 2026.
To avoid paying the super guarantee charge you'll need to pay and make sure these super guarantee contributions reach your employee's super fund by the due dates. For information on due dates, see:
- Super payment due dates for quarters ending on or before 30 June 2026
- Payment deadlines for Payday Super from 1 July 2026.
Employment termination payments and unused leave payments don't form part of an employee's ordinary time earnings or qualifying earnings. So you don't need to calculate and pay super guarantee on these amounts.
Finalising STP data
Let us know your STP reporting for an employee is complete by finalising your STP data.
You can finalise an employee’s STP information any time throughout the year. You will be exempt from issuing a payment summary for amounts reported and finalised through STP.
Your employees can access their ‘tax ready’ income statements in ATO online services, through myGov, when preparing to lodge their tax return.