Termination pay is another name for the final payment an employee receives when their employment ends. It differs from regular pay because it includes:
- Any time worked since the last pay period
- Any leave entitlements owed to the employee
- Any other contractual benefits such as notice periods or redundancy compensation
- Any other agreed payments, such as a bonus or commission
It is paid on their last day of work, or no later than the next pay period from the actual termination date. An employment agreement will usually state when termination pay needs to be processed, so it’s best to check and confirm.