If an employee abandons their job, or gives insufficient notice to the employer, it is permissible to withhold monies from the final payment to compensate for the time that would normally be required to be worked out (the notice period). Often this amount of time is dictated within employment awards or agreements and may vary according to position and age.
Note: You will notice on selecting the option The Employee did Not Give Sufficient Notice the field for the Deduction in lieu of notice is greyed out with a note appearing in bold indicating that the deduction in lieu of notice will need to be processed outside of the termination wizard as a deduction to ensure the overall taxation treatment is correct.
Once you have completed the Termination Wizard, you will be back to the Adjustment screen. Select Allowances on the left, Add, then select the Deduction In Lieu of Notice allowance and enter the amount you need to deduct.
If you do not have a Deduction in Lieu of Notice allowance available in the drop down list, you will need to create one.
In the Description box, type in the name of the allowance e.g. In Lieu Of Notice, then press Tab or click on the amount payable box.
An Unlisted Allowance screen will pop up, click Yes as we wish to add the allowance to the list and the Allowance Wizard will open, Next.
Select Standard Allowance, Next.
On the Allowance Details sceen, change the Type to Deduction, ensure the Frequency is set to Each Pay and tick the Taxed box. You can leave the Amount as zero to reuse the allowance at another point in time, Next.
If you do not need to set up the General Ledger Details, Next.
On the Confirm New Allowance Details screen, Finish to close the Wizard and add the new allowance to the list.
Now enter the amount you need to deduct in the Amount Payable field, OK.
Note: You may need to adjust the tax on the wages adjustment screen to compensate for the deduction in lieu of notice amount.