Cessation Reasons are a requirement of Single Touch Payroll reporting (STP) and were introduced with the rollout of STP Phase 2. Cessation Reasons are included when terminated employees are reported in the STP pay event, together with other termination details, to provide employment separation information directly to the ATO. This replaces the need for an employer to supply a departing employee with a physical employment separation certificate.
When the ATO processes pay event information, the relevant separation details are provided directly to Centrelink and/or other government agencies that may previously have required a physical certificate.
The list of valid Cessation Reasons is defined by the ATO. These are:
Voluntary Cessation
Ill Health
Deceased
Redundancy
Dismissal
Contract
Cessation
Transfer
The list cannot be edited, but Cessation Reasons are assigned to Termination Reasons. One Cessation Reason can be assigned to a Termination Reason at a time. When a Termination Reason is selected for the employee, the assigned Cessation Reasons is automatically included in the pay event.
Assigning a Cessation Reason to a Termination Reason
Go to the left hand menu and select Configuration then Termination Reasons.
Select the Edit button or click anywhere in the list of Termination Reasons to enable editing.
Click on the Cessation Reason field next to a Termination Reason to display a drop-down list.
Choose a Cessation Reason from the list. If a Cessation Reason was already assigned, it is replaced.
Click Save.