Please refer to IRAS's explanation of how to cater to retrenchment benefits.
Example retrenchment benefits:
Notice in lieu (employer pay)
Gratuity for past service
Compensation for loss of employment
You need to break the retrenchment benefits into a few pay elements and categorise the taxable properties as follows:
Notice In Lieu
Go to the Payroll module.
Click Setup, Pay Element Setup, New.
Type the Pay Element ID as Notice I Lieu.
Select Allowance, and click Next.
Select None of the above and click Next.
Select Standard Allowance, and click Next.
Select Free and click Finish.
In the Selected panel, select the Notice Pay Code and Save. Arrow over the Notice Pay Code from left to right.
Gratuity
Go to the Payroll module.
Click Setup, Pay Element Setup, New.
Type the Pay Element ID as Notice I Lieu.
Select Allowance, and click Next.
Select None of the above and click Next.
Select Standard Allowance, and click Next.
Select Free and click Finish.
In the Selected panel, select the Gratuity and Save. Arrow over the Gratuity from left to right.
Compensation
Refer to create pay element compensation.