# How to pay an employee an ETP that is over the tax-free cap

KB124

### Overview

When you terminate someone, select the employee, and click the terminate button or right click on their name in the employee listing of the pay run and select terminate.

The termination form will pop up to fill in the details of the termination. Enter all the required termination details and enter the amount of the ETP that is over the tax-free cap. This amount will be automatically taxed based on the settings under System > Preferences > Payroll tab.

Any amount under the cap needs to be added as a pay item, as an allowance after tax if it is tax free.