Processing final payments for deceased employees

When an employee passes away, you will need to process a special pay to their beneficiaries, which may include:

• dependents
• non-dependents
• the trustee of the deceased estate.

In this guide

Renaming deceased employees

The Australian Tax Office requires deceased employees need to be renamed to include the phrase "Estate of the Late".

To rename a deceased employee:

1. Select Module > Payroll > Payroll Employee Maintenance using the Main menu.
2. Search for the deceased employee.
3. Select the record of the deceased employee using the Payroll Employee Selector, if necessary.
4. Click the Personal tab.
5. Click to launch Community Maintenance.
6. Type Estate of the Late into the Surname field.
7. Click OK.
8. Click File > Save using the Main menu.

Recording employment termination details for deceased employees

Deceased employees need to have their employment termination details updated to let the ATO know why they stopped working.

To record employment termination details:

1. Select Module > Payroll > Payroll Employee Maintenance using the Main menu.
2. Search for the deceased employee.
3. Select the record of the deceased employee using the Payroll Employee Selector, if necessary.
4. Click the General tab.
5. Select the Terminated field to flag the employee as terminated.
6. Select the employment termination date using the Terminated Date field.
7. Select the Deceased using the Reason drop-down list.
8. Click OK.
9. Click File > Save using the Main menu.

Updating tax scales for deceased employees

Deceased employees  

To update the tax scale of a deceased employee:

1. Select Module > Payroll > Payroll Employee Maintenance using the Main menu.
2. Search for the deceased employee.
3. Select the record of the deceased employee using the Payroll Employee Selector, if necessary.
4. Click the Tax tab.
5. Select DBXX using the Tax Scale drop-down list.
6. Click OK.
7. Click File > Save using the Main menu.

Processing final payments

To process the final payments:

1. Create a special pay for the deceased employee. See Creating special pay runs.
2. Select Module > Payroll > Current Pay Maintenance from the Main menu.
   1. Add the following pay code lines as required:
      
      • Salary and Wages