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AU: Rehired Employee Tax On Annual Leave On Termination Payment Showing Under "Tax Deduction" Instead Of "Termination Leave Deduction" (Doc ID 2974601.1)

Last updated on NOVEMBER 05, 2023

Applies to:

Oracle HRMS (Australia) - Version 12.2.8 and later
Information in this document applies to any platform.

Symptoms

For Annual Leave Payment on Termination, system is deducting tax via regular Tax Deduction element and not through Termination Leave Deduction.

Example:

Employee terminated as on 24-Jun-2023
Actual = 24-Jun-2023
LSD = 24-Jun-2023
FP = 24-Jun-2023

Period: 25-Jun-2023 to 01-Jul-2023

Employee rehired as on 25-Jun-2023           --> for the purpose of moving to a different Legal Employer and Payroll as part of restructuring

A new assignment with "-2" got created for the employee.

Assign different payroll and legal employer to the new assignment.

Employee is terminated as on 30-Jun-2023
Termination Type = Normal Termination
Actual = 30-Jun-2023
LSD = 01-Jul-2023
FP = 07-Jul-2023

Enter the termination payment elements

Annual Leave on Termination
Payment = 10573.30
Loading = 1850.33

ETP On Termination
Unused RDO = 1029.38
Unused Sick Leave = 3919.91

Run Quickpay

SOE:
Taxable Earnings:
Annual Leave = 10573.30
Annual Leave Loading = 1850.33
ETP Payment = 4949.29

Tax Deductions:
Tax Deduction = 5276.00
ETP Deduction = 1584.00

++ ETP Deduction pertains to ETP Payment
++ But for Annual Leave pay, the tax deduction is expected in the element 'Termination Leave Deduction' but is shown in the element 'Tax Deduction'.

 
The issue can be reproduced at will with the following steps:
1) Terminate the employee

Responsibility: AU HRMS Manager
Navigate to People > Enter and Maintain > Others > End Employment
Enter termination details and save

2) Rehire the employee

Responsibility: AU HRMS Manager
Navigate to People > Enter and Maintain
Rehire the employee

4) Assign different payroll and legal employer to the new assignment.

Responsibility: AU HRMS Manager
Navigate to People > Enter and Maintain > Assignment
Enter Payroll and Legal Employer and save

5) Terminate the employee again

Responsibility: AU HRMS Manager
Navigate to People > Enter and Maintain > Others > End Employment
Enter termination details and save

6) Enter the termination payment elements

Responsibility: AU HRMS Manager
Navigate to Fastpath > Termination Payments
Enter annual leave and termination payment details and save

7) Run Quickpay and check the tax calculation

Cause

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In this Document
Symptoms
Cause
Solution
References


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