USER MANUAL FOR ETP WHOLE OF

INCOME - NON- CE.

This document is relevant for customers on release 500 and above as far as Payment Summary is concerned.
Accordingly, it is valid from release 4.70 onwards for Termination organiser.

For more details on the Legal Change, see www.ato.gov.au/leavingwork.

NEW SPECIFICATION FOR PROCESSING CLASS 60

Processing Class 60 (along with 77) is used to identify Termination payments wage types separately.
So far there was only one kind of payment, but now since we have Excluded and Non Excluded payments, which are
reported separately, we need new wage types. The existing wage types will be considered for Non Excluded payments
wage types, and there are new wage types for Excluded payments. For the new model wage types we need new
specifications of Processing Class 60, which are as follows:

Specification Short Text Description

M Excluded LB For Excluded life Benefit below cap
ETP 31.5%

N Excluded LB For Excluded Life benefit below cap and above preservation age
ETP 16.5%

O Excluded LB For Excluded Life benefit above cap as well as above

ETP 46.5% preservation age

P Excluded Split For Excluded Life Benefit with Split below cap
LB 31.5%

Q Excluded Split For Excluded Life benefit with Split below cap and above
LB 16.5% preservation age

R Excluded Split For Excluded life benefit with Split above cap for below as well as
LB 46.5% above preservation age

S ETP Tax free For Excluded Tax free amount.

Excluded
amount
NEW WAGE TYPES CREATED
Name Short Text Description
I801 Other taxable Payments If the employee has some Taxable payments
received other than Salary and ETP payments.
Use I801 wage type to enter that amount through
Infotype 0015
/TTP Total Taxable payments This wage type is sum of Total taxable payments
that employee received. This includes /106 + I801
+ Excluded payments Non Excluded payments.
/WIC Whole of Income cap This is the calculated Cap amount for the Non
Excluded payments.
I751 Excluded LB ETP Excluded payment below the Cap amount
31.5% (CAPLB constant) for employees below
preservation age.

Processing class 60 Specification M

I752 Excluded LB ETP Excluded Payment below the Cap amount
16.5% (CAPLB constant) for employees above
preservation age.

Processing class 60 Specification N

I753 Excluded LB ETP Excluded payment above Cap amount (CAPLB
46.5% constant) for all employees.

Processing class 60 Specification O

I764 Excluded Split LB Excluded Split payment below the Cap amount
31.5% (CAPLB constant) for employees below
preservation age.

Processing class 60 Specification P

I765 Excluded Split LB Excluded Split Payment below the Cap amount
16.5% (CAPLB constant) for employees above
preservation age.

Processing class 60 Specification Q

I766 Excluded Split LB Excluded Split payment above Cap amount
46.5% (CAPLB constant) for all employees.

Processing class 60 Specification R

/477 Tax Excluded LB Tax Wage type for Normal Excluded Life benefit
payment

/478 Tax Excluded Split LB Tax Wage type for Split Excluded Life benefit
payment
/479 DB dependent Tax Tax wage type for Normal Death benefit
dependent payment
/47a DB Split dependent Tax Tax wage type for Split Death benefit dependent
payment
Excluded LB ETP
/EXM Technical WT
31.5%
Excluded LB ETP
/EXN Technical WT
16.5%
Excluded LB ETP
/EXO Technical WT
46.5%
Excluded Split LB
/EXP Technical WT
31.5%
Excluded Split LB
/EXQ Technical WT
16.5%

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 Excluded Split LB
/EXR Technical WT
46.5%
/GXB Excluded Gross life
Benefit Technical WT
Tax free part of Excluded payment
I760 ETP Tax free Excluded
Processing class 60 Specification S
In case of a termination reason other than Death Benefit (Paid to Non-Dependent, Dependent or Trustee), the
following payment wage types will be created.
Note: Wage types in GREEN are newly created.

Split Under
Payme Excluded preservation
nt? Payment? age? Below Cap? Wage type Generated Tax Wage Type
Yes Yes Yes Excluded Split LB /478
Yes I764 31.5%
Excluded Split LB
No I766 46.5%
No Excluded Split LB
Yes I765 16.5%
Excluded Split LB
No I766 46.5%
No Yes Split LB ETP < age < /472
Yes I714 cap
No I716 Split LB ETP > cap
No Split LB ETP > age <
Yes I715 cap
No I716 Split LB ETP > cap
No Yes Yes Excluded LB ETP /477
Yes I751 31.5%
Excluded LB ETP
No I753 46.5%
No Excluded LB ETP
Yes I752 16.5%
Excluded LB ETP
No I753 46.5%
No Yes Yes I701 Life Benefit ETP 31.5% /471
No I703 Life Benefit ETP 46.5%
No Yes I702 Life Benefit ETP 16.5%
No I703 Life Benefit ETP 46.5%

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NEW RULE QTP1
This new rule is used to create the Total Taxable payment (/TTP) wage type from Full Taxable Gross (/106) wage type
(RT and CRT) and Other Taxable payments (I801) wage type, from RT and CRT.

NEW PAYROLL OPERATION QTERP

This operation is used in rule QTP1, for the following purposes:
To identify if the payroll simulation is called from Termination Organizer or not. If the operation is called without
specifying any parameter, then it will update the number field in return. If the return value is 1 then it is simulation run
from Termination organizer or else it is not simulation run from Termination organizer.
If the operation is called with a wage type as a parameter, then it will fetch the value of that wage type from the CRT
table in current OT record. Further it can be used to update the Total Taxable payment (/TTP) wage type as used in
QTP1 rule.

NEW T511K CONSTANT WICCP

This constant stores the value $180,000, which will be used to determine whole of income.

CHANGE IN PRIVATE SECTOR TERMINATION ORGANIZER

Once you run the Termination organizer and go to the Detail Screen of the employee, you will see a new column
named Excluded added in Leave payments tab and Termination Payments tab as shown below.

These columns have checkboxes, which the user can use while terminating to Select the Unused Quota Payment or
Termination payment wage types as Excluded. If the checkbox is not selected, then that Quota Payment or
Termination payment will be treated as Non-Excluded Payment by default.

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LEAVE PAYMENTS TO BE CONSIDERED AS ETP FOR
PRIVATE SECTOR
If the Leave payment should be considered as ETP, you should have done the following things:
1. Create an entry in view V_T5QRP mapping the wage type to Redundancy model and select one of the following
options:
Lump sum D
Invalidity
Others

2. And for that wage type, the Evaluation Class 12 has to be NP so that it is considered as Notional payment and will
not be considered twice.

When the Termination organizer is executed, the user has the option to make the payment as Excluded or Non-
Excluded by selecting the check box in Projected Leave tab.

If the user has selected the checkbox, and there is an entry of the wage type associated with Leave Quota is marked
as ETP (in V_T5QRP), then that Leave payment will be part of Excluded Payment.
If the user has not selected the checkbox, and there is an entry of the WT associated with Leave Quota is marked as
ETP (in V_T5QRP), then that Leave payment will be part of Non-Excluded Payment.
If the WT is not marked as ETP (in V_T5QRP), then the Excluded checkbox does not make any difference to
calculation.

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 Now once the Payment are considered as Excluded and Non-Excluded. Then for the Excluded Payment WTs
V_T5QRP is checked if Lum Sum D option is selected and if yes then only Lum Sum D component will be deducted
from that Payment WT if not then the WT will be considered entirely as Taxable.

CHANGE IN PUBLIC SECTOR TERMINATION WORKBENCH

Once you run the Termination organizer and go to the Detail Screen of the employee you will see a column named
Excluded added in Leave payments tab and Termination Payments tab as shown below.

These columns have checkboxes, which the user can use while terminating to Select the Unused Leave Payment or
Termination payment Wage types as Excluded. If the checkbox is not selected, then that Quota Payment or
Termination payment will be treated as Non-Excluded Payment by default.

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NEW CUSTOMIZING VIEW TO CONTAIN ETP PAYMENT
CODES
Through view V_T5QPC, Evaluation class 11 specifications of wage types is mapped to the ETP Payment code. The
payment code is picked up by PS generation report.

V_T5QPC

Country Grouping Evaluation class Evaluation class ETP Payment Code

specification
13 11 DE D
13 11 DT T
13 11 ED N
13 11 EL O
13 11 LE R
13 11 S1 P
13 11 S3 B
13 11 SE S
13 11 T1 D
13 11 TD N
13 11 TE R
13 11 TL O

NEW EVALUATION CLASS 11 SPECIFICATIONS CREATED

FOR NON-EXCLUDED PAYMENTS

Evaluation class11 specification Description

LE Excluded Life Benefit ETP
SE Excluded Life Benefit Split ETP
DE Death Benefit Dependent ETP
T1 Tax DB Dependent
T2 Tax DB Split Dependent
TE Excluded Life Benefit Tax
C4 ETP Tax free Excluded Component
C5 Split ETP Tax free Component
C6 Split ETP Tax free Excluded Component
DT Death Benefit Trustee ETP
TS Excluded Split Life Benefit Tax

NEW SUBTYPES CREATED FOR IT 0850

Subtype Name
B Split Death Benefit Non- Dependent
D Death Benefit Dependent
N Death Benefit Non-Dependent
O Life Benefit ETP- Non Excluded
P Life Benefit ETP Split - Non Excluded
R Life Benefit ETP- Excluded
S Split Life Benefit- Excluded
T Death Benefit Trustee

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 WAGETYPES USED IN PAYMENT SUMMARY FOR ETP

I751 (new) Excluded LB ETP Excluded payment below the Cap amount
31.5% (CAPLB constant) for employees below
preservation age.

Evaluation class 11 Specification LE

I752(new) Excluded LB ETP Excluded Payment below the Cap amount
16.5% (CAPLB constant) for employees above
preservation age.

Evaluation class 11 Specification LE

I753(new) Excluded LB ETP Excluded payment above Cap amount (CAPLB
46.5% constant) for all employees.

Evaluation class 11 Specification LE

I764(new) Excluded Split LB Excluded Split payment below the Cap amount
31.5% (CAPLB constant) for employees below
preservation age.

Evaluation class 11 Specification SE

I765(new) Excluded Split LB Excluded Split Payment below the Cap amount
16.5% (CAPLB constant) for employees above
preservation age.

Evaluation class 11 Specification SE

I766(new) Excluded Split LB Excluded Split payment above Cap amount
46.5% (CAPLB constant) for all employees.

Evaluation class 11 Specification SE

I711 Death Benefit D 46.5% Evaluation class 11 Specification DE
I713 DB dependent - No Tax Evaluation class 11 Specification DE
I712 Death Benefit - Trustee Evaluation class 11 Specification DT
I725 Split DB ETP - Trustee Evaluation class 11 Specification DT
I723 Split DB ETP D < cap Evaluation class 11 Specification DE
I724 Split DB ETP D < cap Evaluation class 11 Specification DE
/477 Tax Excluded LB Tax Wage type for Normal Excluded Life benefit
payment

/478 Tax Excluded Split LB Tax Wage type for Split Excluded Life benefit
payment
/479 DB dependent Tax Tax wage type for Normal Death benefit
dependent payment
/47a DB Split dependent Tax Tax wage type for Split Death benefit dependent
payment

IT0850 SCREEN
For Infotype 0850, a new screen is created to include the subtype field.

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EXAMPLE SCENARIOS FOR USING THE NEW SOLUTION
Excluded and Non- Excluded payments

An employee of age 30 years has been in the company for 2 years and is terminated due to genuine redundancy. As
termination payment he has some payment as Excluded and some as Non Excluded.

The employee has received $140,000.00 as other taxable payments (Salary and wages) during the current financial
year.

Before running the Termination organizer, check if the Redundancy model is set up correctly and the wage types are
configured in view V_T5QRP.

Note: If the wage type is configured as Lump sum D in V_T5QRP and made as Non-Excluded payment in
Termination organizer, then it wont be considered for deducting Lump sum D Tax free payment. Only
Excluded payment configured as Lump Sum D in V_T5QRP will be considered for Lump Sum D deduction.

So once we go to Employee details screen and have below wage types to be paid.
Lieu of Notice 110,724.64 (Excluded payment)
Severance Pay 10,920.28(Non-Excluded Payment)

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PRIVATE SECTOR TERMINATION ORGANISER
Make sure to select the wage type which is to be paid as Excluded payment in the Column Excluded check
box.

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Press Calculate Pay. The termination organizer will perform necessary calculations, and creates the following wage
types:

Calculated Tax free limit = $8,806 + ( 2(service years) * $4,404 ) = 17,614

As the Lump Sum D should only be deducted from Excluded payment.

I031 = $17,614

Taxable Excluded payment will be 110,724.64 - 17,164.00 = 93560.64

This Excluded payment will be checked with the ETP cap (CAPLB constant) $175,000.00 and as it falls below the cap
excluded payment will be taxed with 31.5%

Excluded payment below cap I751 = $93,560.64

Tax calculated /477 = $29,471.00-

Next we go to the non- excluded payment.

First, the wage type Total taxable payment (/TTP) will be calculated

/TTP = $140,000.00(Salary received ) + 93560.64( Taxable Excluded payment) = $ 233,560.64

Note: In case there are any other Taxable payments for the employee, which is not part of the salary then it has to
be added in IT0015 with new Wage type I801. Then in rule QTP1 this wage type will be added to /TTP. I801 can
also be used to adjust /TTP wage type.

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 Next Whole of income (/WIC) wage type is created

WICCP (constant T511k) - /TTP = 180,000.00 - 233,560.64 = - 53560.64

Then this value is compared with CAPLB (constant T511k) 175,000.00 and smaller of the two will become the Whole
of income cap /WIC.
As -53,560.00 is negative /WIC will be zero.

/WIC = $0

Next we check for Non Excluded payments I405 $10,920.28 with the new cap /WIC.
As the cap is zero the entire amount will be taxed with 46.5%
Non-Excluded payment I703 = $ 10,920.28
Tax calculated /471 = $5,078.00

Wage type Amount

Salary Wages 140,000.00
I405 10,920.28
I406 110,724.64
I703 10,920.28
I751 93,560.64
I031 17,614
/471 5,078.00
/477 29,471.00-
/TTP 233,560.64
/WIC 0

PUBLIC SECTOR TERMINATION WORKBENCH

A similar processing takes place in Termination Workbench, but the Simulation has to be done twice. Once the
simulation is run, wage types will be updated in the list then user has to and select which payment will be Excluded
other unchecked payments will be and run the Simulation again as to get the final payments based on the Whole of
Income cap for Non Excluded payments and ETP cap for Excluded payments.

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Once employee is terminated as per above process, Payroll is run for the period and PS report should be run.

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Payment Summary report is run with ETP and PS selected as shown.

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Thus, PS and ETP forms are generated.

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ETP Payment Summary with Payment Code O

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ETP Payment Summary with Payment Code R

Two ETP summaries, one for Life Benefit and the other for Life Benefit Excluded are generated. The new layout for
ETP summary consists of ETP Payment code.

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ETP Infotype is updated with two new records and looks as follows:

Infotype record with Subtype O

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Infotype record with Subtype R

Accordingly, ATO report picks up both the records and reports it in the Annual file.

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Output:

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Note: There can be more than one ETP generated for one termination, which can be Excluded and Non-Excluded ETP.

Similar scenario is valid for Split ETP case as well.

CHANGES FROM OLD SOLUTION FOR PS REPORTING

Payment Summary solution will no longer read customizing table T5Q30 to determine the reason for termination to
categorize ETP payment as a Death Benefit paid to either Dependent/Trustee /non-Dependent. The new solution will
Report them based on Evaluation class of model wage types as per customizing view V_T5QPC.

As per old solution, even if the wage type I703 is maintained, with Action type as Leaving, and Action reason as Death
PS generation reports it as Death Benefit.

Example 1: Employee 13432103 is terminated in financial year 2013, In this case if the Action type is Leaving and
Action reason is Death Benefit, paid to the Non-Dependent WT I708 is updated in It0015.

Run payroll:

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PS generation program reports Death Benefit ETP with payment code N.

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IT 0850 is updated.

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Example 2: An Employer makes a $100,000 golden handshake payment to its loyal employee on termination in two
instalments of $50,000. First payment is made in September 2012. ETP payment summary showing date of payment 1
September 2012, taxable component of $50,000, the tax withheld and code O. Employer then makes the second
payment in March 2013. In this case as per ATO guidelines, system should generate a separate ETP payment
summary showing taxable component of $50,000, tax withheld (remembering to include the first instalment in the
calculated whole of income cap), the tax withheld and code O. This is Multiple ETP.

System does not support Multiple ETP scenarios; instead you need to regenerate ETP once the second instalment is
made to the employee in March 2013. Hence the same Infotype record is modified.

Example 3: An employee 13432110 is terminated on 30-09-2012 and paid an amount of $9000 as Life benefit Non-
excluded.

Hence ETP is generated.

He is rehired on 01.12.2012 and terminated again on 15.01.2013 and paid an amount of $9000, hence ETP is
generated as shown.

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