Available for the following plans: Plans connected to both Employment Hero HR and Employment Hero Payroll (KeyPay)
Available for the following user access levels: Admin
The Termination Wizard guides you through offboarding an employee. It calculates leave payouts and Employment Termination Payments (ETP), records notice periods, and syncs data to Employment Hero Payroll.
Getting started
The Termination Wizard is available in Australia for Employment Hero HR accounts connected to Employment Hero Payroll (KeyPay), specifically for offboarding employees who are synced to payroll (unconnected employees use the legacy flow).
Access is based on user permissions: Admins and Termination Payroll Details users have full access to complete all four steps, while users with the Offboard Employees only permission can complete Step 1 to log termination details before handing the process over to an admin or payroll user.
How to terminate an employee
- Go to People > People List and select the employee profile.
- Click Start offboarding in the top-right corner to open the wizard.
Fill out the following fields:
- Termination date: Today's date or a future date.
- Termination type: Select a reason (e.g., Voluntary Cessation, Redundancy, or Dismissal).
- Comment: Add optional notes.
- Consider for rehire?: Select Yes or No.
- Employee access: Choose when access ends (e.g., Remove access immediately).
- Payroll cutoff type/date: (Future dates only) Select a cutoff date to process pending timesheets and leave before payroll offboarding.
- Notice period handling: Select how notice is handled (e.g., Notice worked in full, Payment in Lieu of Notice (PILON), or No notice required).
- Total notice period: Enter the notice period in weeks (optional if no notice is required).
Click Continue. If you only have "Offboard Employees" access, click Ready for Payroll to hand off the termination.
The wizard shows leave balances based on finalised pay runs with updated payslips in HR.
Leave balances may differ in payroll
Final leave amounts are recalculated in Employment Hero Payroll to include unfinalised pay runs and pro-rated accruals up to the termination date.
Leave rules by employment type:
- Permanent employees: Annual leave payouts are mandatory by Australian law and cannot be turned off.
- Casual employees: Annual leave rules do not apply, so the leave toggle can be adjusted.
Long Service Leave (LSL) only appears if a balance exists in HR. The LSL toggle is off by default.
Review the balances and click Next.
Enter dollar amounts for applicable Employment Termination Payment (ETP) components:
- ETP Life Benefit (Type O): General life benefit payments.
- Ex Gratia / Severance (Type O): Severance or ex-gratia payments.
- Additional PILON (Type O): Available if PILON was selected in Step 1.
- Genuine Redundancy (Type R): Available only for Redundancy terminations. Recorded as Type R and shown under Lump Sum D in payroll.
Click Next.
How redundancy payments work
Redundancy payments are automatically categorised under Lump Sum D in payroll. Tax-free portions show as $0.00 taxable component and $0.00 tax withheld. Type O payments are taxed normally and are not assigned to Lump Sum D.
Review the payment summary. Taxes are calculated automatically in real time for ordinary pay, leave payouts, and Type O payments. Type R payments show as tax-free.
Click Terminate to finish.
After you terminate
After you click Terminate:
- The employee is marked as terminated in payroll (on the termination date for future-dated requests).
- Termination details, notice periods, leave payouts, and ETP amounts sync to payroll automatically.
- A payroll user creates the final pay run and includes the employee to process the pre-populated values.
Work hours and pay are pro-rated up to the termination date, following standard Employment Hero Payroll rules.
The wizard completes immediately in HR, but details sync to payroll on the scheduled termination date.
Important: Do not create the final termination pay run until after the termination date has passed. Early pay runs will treat the employee as active and will not import termination data.
If you only complete Step 1, click Ready for Payroll. A Termination in Progress tag will appear on the employee's profile.
An admin or authorised payroll user can complete Steps 2–4 via:
- Employee profile: Open the profile to resume from Step 2.
- Readiness Hub: Go to Pay > Readiness Hub and click Complete next to the employee.
Note: Admins should check the Readiness Hub regularly, as automated notifications for handoffs are not yet available.
HR-only accounts can access the Readiness Hub to view offboarded employees, but other wizard features do not apply.
Once completed, admins and authorised payroll users can view the Termination Details widget on the employee profile. It summarises termination dates, reasons, leave payouts, and ETP breakdowns.
Frequently asked questions
No. It only applies to employees connected to Employment Hero Payroll. Unconnected employees use the legacy offboarding flow.
No. It is only available for Australian accounts connected to both Employment Hero HR and Employment Hero Payroll (KeyPay).
HR-only accounts can offboard employees, so offboarded records appear in the hub for tracking purposes.
Status is pulled from the 'Casual' setting on the employee record, which controls whether annual leave payout rules apply.
Hours and pay are pro-rated automatically based on the termination date.
Wait until the termination date has passed so that termination components sync properly to the pay run.
Only when setting a future termination date.
The wizard shows finalised HR totals. Payroll recalculates the exact balance at the time of the pay run, including unfinalised accruals.
Yes. The wizard syncs data, but payroll admins still create and run the final pay run.
Supported types: ETP Life Benefit (Type O), Ex Gratia / Severance (Type O), Additional PILON (Type O), and Genuine Redundancy (Type R).
Redundancy amounts are logged as Type R and assigned to Lump Sum D automatically in payroll.
Yes, if an LSL balance exists in HR. The toggle is off by default and can be enabled.