In the unfortunate event that an employee dies, no further payments should be made to the employee. Instead, you will need to hold any outstanding payments until you have been advised by the Executor of the deceased estate.
There may be circumstances that the employer may not be aware of, such as debts or child support. Due to the nature of the termination and delays that can occur in obtaining the required information, it is recommended that all payments be made outside of WageEasy.
Upon the death of an employee, there are several things to consider. These include:
What amounts may be owing (e.g., salary or wages, unused leave entitlements, or possible Employment Termination Payments (ETPs), etc.)?
Who should the amounts be paid to (e.g., the Estate or a Person)?
What tax, if any, should be withheld?
What TFN (Tax File Number), if any, needs to be used?
What information needs to be provided about the payments and to whom?
How that information needs to be provided (e.g., Statement about the payments, Payment Summary, etc.)
For more information, please refer to the links below:
When an employee transfers or leaves | Australian Taxation Office (ato.gov.au) - refer to the sections about ETP types you can report and Paying an ETP to a death beneficiary
Any outstanding salary or wages, paid leave taken, allowances, overtime, bonuses and commissions, or directors’ fees that were payable upon death of the employee, but not paid to the employee before death and are not ETPs should be completed manually outside of WageEasy Depending on the instructions from the estate the payments are made to either the estate of the deceased employee or the person entitled to the money under instruction from the correct authority. These amounts must not be shown on the deceased employee's STP update to the ATO; however, these amounts will need to be included in your BAS reporting.
Any ETP payments owed to the employee need to be paid to either the estate of the deceased employee or the person entitled to the money. These amounts will need to be reported via STP, and in some circumstances, tax is withheld. Payments can include any unused Rostered Days off or unused Sick Leave (if applicable).
Terminate the Employee Record in WageEasy
To terminate the employee record with a Termination Reason of Death, you will need to complete the following steps:
Go to Employee Details, Employment, Employment, and enter a date in the Terminate box and type a reason Death, in the Reason box. This will stop leave accruals as well as the employee appearing in the Wages, Time Sheet.
In most instances, any outstanding super payments will need to be paid to the Estate as the Superannuation Fund won't accept any further payments. For the latest information, use the ATO as your main reference.