Answer
Final leave payouts, cash-ups, redundancy amounts, and other termination amounts may be taxed as lump sum or extra pay depending on the payment and current IRD rules.
Use the termination form for final pay calculations and review the tax shown before completing the pay. If an employee has a special tax code, student loan treatment, tailored rate, or unusual termination payment, confirm the correct tax treatment before finalising.
Do not change the leave balance to fix a tax result. Adjust the pay tax settings or termination amounts according to the IRD calculation that applies.
