---
title: "In Lieu of Notice | HR Terminations"
slug: "in-lieu-of-notice"
description: "Learn about Terminations In Lieu of Notice in Marlin HR payroll software for tyre and mechanical workshops."
updated: 2025-05-29T03:59:58Z
published: 2025-05-29T03:59:58Z
canonical: "help.megabus.com.au/in-lieu-of-notice"
---
> ## Documentation Index
> Fetch the complete documentation index at: https://help.megabus.com.au/llms.txt
> Use this file to discover all available pages before exploring further.
# Payments In Lieu of Notice
{{variable.HR Bold}} enables robust handling of terminations in lieu of notice.
If you did not give an employee the required notice of termination you may be required to make an [in lieu of notice](/hr/docs/in-lieu-of-notice) payment to them.
The ATO requires this payment to be reported with an [ETP Code of 'O' (for Other) and have superannuation paid on it](https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/working-as-an-employee/leaving-your-job/employment-termination-payments-for-employees).
{{snippet.Expert Advice}}
## Quick Reference
@(Embed)(https://cdn.document360.io/d7282b31-60c4-41e6-bf87-3f684d4da049/Images/Documentation/HR%20–%20Terminations%20Quick%20Ref.pdf){height="320" width="640"}
## In Lieu of Notice Allowances
There should be an allowance type already set up in HR called **Payment In Lieu of Notice by Employer**.
This can be checked by selecting **System > Allowances** from the menu bar.
:::(Warning) (Tip)
Click **{{glossary.Update}}** to update the list with the lates Megabus-supplied allowances.
:::
:::(Info) (Note)
**Do not use Standard Hours** for a payment in lieu of notice as it will not be reported correctly to the ATO and the system will calculate leave accruals on the standard hours and add them to the unused leave payouts.
:::
## In Lieu of Notice Payments
#### Payrun > Payrun Processing > Initialise > [Employee]
To add an in lieu of notice payment:
* Select **Before Tax Allowance** in the employee's Pay Advice window
* Click on the **Add** button below
In the **Employee Allowance** pop-up:
* Use the **Allowance** picker at the top to select **Payment in Lieu of Notice by Employer**
* Leave the **Tax-Free Component** as **$0**
* Enter the **Amount**
* Tick **Add Amount** checkbox
:::(Warning) (Tip)
To determine the **Amount**:
* Multiply the number of hours you are required to pay by the employee's **Standard Pay Rate** (as entered in [Employee Maintenance](/hr/docs/employee-maintenance)).
* If you are unsure about this, please [seek expert advice from your tax accountant, employer association or the ATO](/hr/docs/clone-termination-pay-runs#expert-advice).
:::
:::(Warning) (Warning)
**Do not use standard hours for a payment in lieu of notice.** This will not be reported correctly to the ATO and also cause HR to calculate leave accruals on the standard hours and add them to the unused leave payouts.
:::