Termination Types, Cessation Reasons, and Termination Reasons are values that are applied when terminating an employee in Access Definitiv. It may seem as if all three options do the same thing, by categorising the reason that an employee is ceasing employment, but each one serves a distinct purpose.
Termination Types
Termination Types are pre-defined values that cover the range of termination scenarios recognised by the ATO. You cannot add, edit, or delete Termination Types.
A Termination Type is selected when terminating an employee and, along with other employee information, determines how tax is calculated on different termination pay items. Changing the Termination Type can change how tax is calculated in the termination pay.
The selected Termination Type can also affect how termination pay items are reported to the ATO.
One or more Termination Reasons can be linked to a Termination Types. The list of Termination Reasons available when terminating an employee is based on the selected Termination Type.
Refer to How Termination Types are used for more details about Termination Reasons.
Cessation Reasons
Cessation Reasons are pre-defined values that report the reason that an employee is ceasing employment. They are a requirement of STP2 reporting, introduced to replace the physical employment separation certificate that may previously have been provided to a departing employee. The Cessation Reason and other relevant information are reported directly to the ATO in the STP pay event and are then distributed to other agencies or departments that may have required a physical certificate. Cessation Reasons do not affect termination pay calculations or how termination pay components are reported.
Cessation Reasons must be mapped to Termination Reasons. When a Termination Reason is applied to a termination, the mapped Cessation Reason is reported in the pay event. You cannot add, edit, or delete Cessation Reasons.
Refer to Cessation Reasons for more information about mapping Cessation Reasons to Termination Reasons.
Termination Reasons
Termination Reasons are user-defined values that are selected when a Termination Type is applied to an employee. Cessation Reasons are mapped to Termination Reasons, making them the link between Termination Types and Cessation Reasons. When terminating an employee, the selected Termination Type determines the list of available Termination Reasons, and the chosen Termination Reason controls the specific Cessation Reason reported in the STP pay event.
Termination Reasons can also be used to group and/or filter data in Access Definitive reports.
Because they are user-defined, you can create new reasons and edit existing ones. Always check that the mapping of Termination Types and Cessation Reasons is still correct after adding or editing Termination Reasons.
Refer to Termination Reasons for more information about setting up Termination Reasons and linking them to Termination Types.