Termination Essentials

NZPPA Certificate in Payroll Termination Essentials (Level 4)

Skill Check 13 – Deductions (Wages Protection Act)................... 85 Government deductions and how they are applied to a termination pay ....86 Skill Check 14 - Government Deductions .................................. 87 Module 5: Tax treatment for payments paid on termination ........ 88 Extra Pay.............................................................................. 89 Common extra pay on termination (not an exhaustive list): ..... 89 Redundancy payments ........................................................................... 90 What to include and exclude from redundancy payments .......... 90 How leave provided under the Holidays Act is taxed.................................. 91 Extra pays (Lump sum paid termination) .................................................... 92 [Special Note] Termination approach to extra pay .................................. 92 Extra Pay being made on termination - Steps to take ................................ 93 Payment from Holidays Act Remediation ................................................... 97 Skill Check 15 - Extra Pays ..................................................... 98 Module 6: Termination documentation ..................................... 99 What must a final pay include? ............................................................ 99 Abandonment of Employment Letter ........................................................ 100 Final Pay Employee Checklist & Questions to Ask...................................101 Legislative records and timeframe that employee record must be kept after termination................................................................................................ 105 Tax and IR record-keeping ................................................................... 105 For each pay period: ........................................................................ 106 This summary includes the following totals: ............................... 106 Appendix A: NZPPA Legal & Best Practice Procedure – Requirements for payroll to pay a deceased employees final pay107 Skill Check 1 - Resignation....................................................................... 111 Skill Check 2 – Redundancy..................................................................... 112 Skill Check 3 – Disciplinary, Retirement & Abandonment ........................113 Skill Check 4 – Not returning from parental leave, Termination from a trial period, Not returning to work from ACC ................................................... 114 Skill Check 5 – Death of an employee, Frustration of contract .................115 Skill Check 6 – Employment Agreement Clauses & Special Agreed Terms ................................................................................................................. 116 Skill Check 8 – 8%, Extended from Termination Date and Alternative Holiday ..................................................................................................... 118 Skill Check 9 – ACC & Parental Leave on Termination............................119 Skill Check 10 – Exit, Restrictive and PG’s .............................................. 120 Skill Check 11- Notice .............................................................................. 121 Skill Check 12 – Agreed Additional Payments.......................................... 122 Skill Check 13 – Deductions (Wages Protection Act) ............................... 123 Skill Check 14 - Government Deductions ................................................. 124 Skill Check 15 - Extra Pays ...................................................................... 125 Document Management........................................................ 126 © New Zealand Payroll Practitioners Association LTD. This is only a guide. It should not be used as a substitute for professional advice. If you have a problem, seek advice from NZPPA on info@nzppa.co.nz , before taking any action.

© New Zealand Payroll Practitioners Association, Mar 2026, Ver 9

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