# How to pay someone a tax free genuine redundancy on termination

KB148

### Overview

To pay someone a tax-free portion of a genuine redundancy amount on termination, a special pay item is added to their final pay run.

### Process

1. Go to Payroll > Setup > Pay items
2. Create a new pay item for your tax-free genuine redundancy
   1. Call it “GENRED” for example
   2. Set it as an allowance AFTER tax
   3. Payment type should be Lump sum: Lump sum D
3. Add this item to the employee’s termination pay

Do not add any tax-free amounts to the ETP box when terminating someone – this is only for taxable ETP amounts.

### Did you find this article helpful?

If this article is missing information, ambiguous, or didn’t give you clear instructions, let us know and we will make it better! Please email us and quote the KB# in the top left of this article to let us know why it didn’t help you out and we will point you in the direction of additional information.

Last edit 23/12/21