The ATO requirement is to report the following information related to ETPs; each employee can have 0 or more ETP's reported grouped by ETP Code and Payment Effective Date.

ETP CodeA code that identifies the reason for the Employment Termination Payment (ETP) being made.
Payment Effective DateDate on which the payment for goods or services was made.
Payee Termination Payment Tax Free ComponentThe tax free component is non-assessable and non-exempt income, that is tax free income.
Payee Termination Payment Taxable ComponentThe amount of the employment termination payment less the Employment Termination Payment (ETP) tax free component.
Payee Total ETP PAYGW AmountThis is the value, during the relevant period, for the amount withheld under the Pay As You Go (PAYG) arrangement.

Note: Tax Free, Taxable and PAYGW Amounts cannot be negative, see making adjustments for more information.

Data Collation

The STP reporting will find all payslip details for the given reportable tax period and branch; and report them based on their payment summary location as follows:

Payment Summary LocationReported As
ETP Tax FreePayee Termination Payment Tax Free Component
ETP TaxablePayee Termination Payment Taxable Component
ETP Tax WithheldPayee Total ETP PAYGW Amount

The data is then grouped by:

  • Reportable Date / Payment Date
  • ETP Code (if not specified this defaults to O)

Single ETP Code Per Payslip

A payslip can only have 1 ETP code which defaults to O, unless specified at the payslip detail line level. Some Pay Component Sub types default an ETP code others do not.

ETP Codes

The ATO recognises the following ETP Codes; by default the ETP Code is set to O if an ETP code is not specified on the payslip detail line:

ETP CodeDescription
RETP made because of one of the following: early retirement scheme, genuine redundancy, invalidity, or compensation for personal injury, unfair dismissal, harassment, or discrimination.
OOther ETP not described by R (for example: golden handshake, gratuity, payment in lieu of notice, payment for unused sick leave, or payment for unused rostered days off).
SETP code R payment received in the current year and received another ETP (code R or code O), or a transitional termination payment, in an earlier income year for the same termination of employment.
PETP code O payment received in the current year and received another ETP (code R or code O), or a transitional termination payment, in an earlier income year for the same termination of employment.
DDeath benefit ETP paid to a dependant of the deceased.
BDeath benefit ETP paid to a non-dependant of the deceased and a termination payment was made to the non-dependant in a previous income year for the same termination.
NDeath benefit ETP paid to a non-dependant of the deceased.
TDeath benefit ETP paid to a trustee of the deceased estate.

Making Adjustments

ETP information is grouped by reportable date and ETP code, and each amount reported must be zero or positive; this means any adjustment that reduces a prior ETP amount must be dated correctly to ensure its correctly grouped otherwise it will be rejected as a negative amount.

Changing ETP Code

If the ETP code associated to the payslip had not been set and defaulted to O; or was incorrectly set, and no other changes need to be made to the amounts. You can edit each payslip detail line and update the ETP code. 

In the example below the ETP Code was incorrectly set to R, To correct the payroll officer views the payslip, edits the payslip detail line and changes the ETP Code.

Once changed and update pay event for the employee needs to be sent to the ATO to reflect the change.

Changing Amounts

Changing one of more of the ETP reported totals requires an adjustment payslip. The adjustment payslip reflects the general ledger change, as well as providing the employee with an additional printed payslip.

If you are not reducing a prior reported ETP amount the payment date does not need to match the prior ETP, however it will be reported as two seperate ETP's.

Changing ETP Code and Amounts

If the adjustment requires a change of ETP codes and amounts you need to create two adjustment payslips:

  • One to reverse the previously reported ETP amounts (must have same reportable date)
  • One to represent the correction and new ETP code.

Frequently Asked Questions

Q. I have a correction to a prior tax year ETP how should this be done?
A. If you reported STP in the prior tax year, then you should set the payment date on the adjustment payslip to the prior tax year and send a previous tax year update. If you did not report STP the change should be reported to the ATO using PSAR and payment summary updates.

Q. Can an employee have multiple ETPs ? 
A. Yes an employee can have multiple ETPs, consult your payroll officer, accountant or HR specialist to ensure you are correctly following ATO guidelines.

Q. Isn't an ETP a lump sum payment why are they separated for STP reporting purposes?
A. The ATO STP reporting specification splits ETP from the lump sum reporting components

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