Termination Essentials

NZPPA Certificate in Payroll Termination Essentials (Level 4)

Employee made redundant while on parental leave

If an employee is on parental leave but through no fault of their own, their position becomes redundant (following a valid redundancy process), payroll will process their final pay, including the following: • The termination date is based on the date the employer provides that the position is no longer present within the business.

• The employee will get a notice period (paid in lieu) when they are on parental leave.

• Employees may get redundancy compensation if that is an agreed term or agreed upon as part of the redundancy process.

• The employee will get any entitlement earned up to the point of termination.

• If earned prior to parental leave, it is the greater of AWE and OWP, and • If earned while on parental leave, only AWE will be used. • The employee will also get any agreed terms in relation to payments on termination from the employee's employment agreement.

• All agreed taxable payments will be included in the 8% on termination.

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

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