Do you know how it is calculated?
It can be a tough time for the business when employees leave or are fired. In order to make it easier for yourself, get to know your obligations for paying out employees. You’d be surprised – it may save you money and time in the future.
When issuing an employee’s final pay it is recommended you refer to the relevant employment contract, award or agreement to determine when it must be paid. If it is not specified we recommend you pay the employee on their last day or on the next pay day. When paying an employee’s final pay you must include their outstanding wages, including penalty rates and allowances, and their accrued annual leave. If it applies you may be obligated to pay annual leave loading, accrued long service leave, or redundancy pay. When ending employment you are not required to pay out sick or carer’s leave.
Providing the correct final pay is essential when an employee leaves the business, as Fair Work is strict when it comes non-compliance. To save yourself from a headache in the future, the best thing you can do is be proactive by familiarising yourself with the awards, agreements and employment contracts relevant to your organisation, and following the requirements stipulated by them.
