This article provides steps on how to process the last pay for an employee.


The following pre-requisites are broken into two sections – LawMaster setup and manual calculations.

Parameter Setup

You will need to ensure that you have created the following parameters to allow you to process the unused leave proportion for the final pay. 

Payroll Leave Types

Create a new leave type for Unused Annual leave as e.g. LU:

 Parameters > Set Parameters > Payroll > Payroll Leave Types (LT).

Create the subsequent Payroll Payment and Deduction Codes parameter for Unused Annual Leave e.g. HLU:

 Parameters > Set Parameters > Payroll > Payroll Payment and Deduction Codes (PC).

Untick Normal Pay so that superannuation is not calculated and untick After Tax so that tax is calculated on the unused annual leave.   (Unusued leave is not considered ordinary times earnings, therefore no superannuation is calculated on this figure).

Manual Calculations

Additional Annual Leave to Last Day of Employment:

You will need to ensure that you have calculated annual leave to the last day of employment. 

 To work out how many annual leave hours are accrued per week:





Hours per day e.g. 7.5, 7.6 or 8



Hours per week e.g. 37.5, 38 or 40 (A * 5 days)



Leave hours per year (20 days * A)



Hours accrued per hour (C / 52 / B)


i.e. 38-hour week you accrue 2.92 hours (D * B)

Example: Total additional hours to accrue for unused annual leave to finish date where you need to accrue for an additional 45.6 hours for the fortnight (6 days * 7.6 hours per day).

Total hours to accrue will be 45.6 hours x 0.0769 = 3.51 hours.

Once you have calculated the additional leave, you will need to add this to any other unused annual leave for that employee on their timesheet when processing the pays (Annual leave accrued shows as a negative amount in LawMaster).

Tax on Unused Annual Leave

On the new Unused Annual Leave code created, the Normal field is unticked, this means that tax will be calculated at a higher rate in LawMaster.  You will need to speak with your Accountant to calculate the tax correctly on the final pay. Also refer to the below link:

Payroll Processing

If the final pay is part of normal payroll processing, generate the pays as you normally would and make any changes as necessary to other employees, otherwise you can manually add a timesheet entry for the leaving employee.

Payroll and Personnel > Payroll Processing > Input and Review Timesheets.  Select Bank > right click > Add Timesheet Entry.

Add any ordinary hours that you are paying, Add Another Pay Item for Unused Annual Leave.  This will include what leave was already unused and the additional accrued leave calculated above.

Note: You will need to select Modify Header to override the tax amount that was calculated manually.  Include all tax to be deducted for this pay run including tax on any ordinary hours paid.

Process the balance of pays as per normal.

Update Employee Record

Once you have audit the pays, and prior to printing pay advices, you will need to go back to the Employee’s master payroll record to enter a leave journal to zero out any annual leave and sick leave.  By doing this prior to issuing a pay slip the leave hours will show as zero.

To to the Employee's master payroll record > Leave Tab.

Right click > Add.  Enter a leave transaction (journal) for Annual Leave (LA) and Personal Leave (LS) to zero out the hours.  You will see that the annual leave has accrued to what you have paid out at unused annual leave.

Once all STP reporting has been done, you can then terminate the Employee in payroll and LawMaster Security.