A Payment in Lieu of notice is not normally worked and is sometimes referred to as Gardening Leave. This is because the employee is still technically employed by the company.
A payment made to an employee in lieu of notice in a termination pay is included in ordinary time earnings (OTE). Refer to the Australian Tax Office page List of payments that are ordinary time earnings. Also, refer to Employment Termination Payment.
Entering a payment in lieu of notice in a termination pay
Because payment in lieu of notice is classed as an employment termination payment by the ATO, this amount needs to be entered as part of the total of the Termination pay. To do this;
Enter the TOTAL ETP AMOUNT into the Term Pay section in the termination Timesheet 1st Screen (including the payment in lieu of notice amount)
Because (as above) the payment in lieu of notice amount will need to have super calculated on it, you need to calculate the super amount manually FOR THAT PORTION OF THE ETP ONLY. The Super component for OTE needs to be entered as a separate line in the termination pay
Enter this super amount as an Employer Contribution Value type timesheet line. See the instructions in the article: Enter Superannuation on an ETP.