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Employment Loss Compensation

This is compensation paid to an employee when their employment ends — for example, a retrenchment or severance payment.

When to use it​

Use it when you pay an employee a compensation amount because their job is ending (such as retrenchment, redundancy or early termination).

How to add it​

  1. In the menu, go to Payroll → Payroll Items → Employment Loss Compensation.
  2. Choose the employee.
  3. Enter the compensation amount.
  4. Set the period it should be paid in.
  5. Click Save.
note

Compensation for loss of employment often has special tax treatment, and part of it may be exempt from tax. The rules can be detailed — check the current position with the tax authority or your accountant before paying.

tip

When someone leaves, you may also need to produce leaver forms such as CP21 or CP22A — see Government Forms.