Termination Essentials

NZPPA Certificate in Payroll Termination Essentials (Level 4)

Skill Check 10 – Exit, Restrictive and PG’s

1. How is an exit inducement payment taxed?

(a) As wage and salary.

(b) No tax as it is a non-taxable payment.

(c) Taxed as extra pay.

(d) Paid as a reimbursing allowance.

2. From the following statement, which one would be considered grounds for a restrictive covenant payment:

(a) The employee's final pay is paid in lieu.

(b) The employee agrees not to work for three months after leaving the employer's employment and will receive a substantial taxable payment.

(c) In a mediation settlement, the employer agrees to pay $15,000 to the employee for the hurt.

3. Is a personal grievance payment made under Section 123(1)(c)(i) included in the 8% on termination?

Yes / No

4. If an employee gets a settlement payment on termination, do they still get minimum leave entitlements under the Holidays Act?

Yes / No

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

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