# 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.

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Last edit 23/12/21