I'm using Quickbooks Online Australia - how do I make an employee inactive?

You have to terminate your employees to make them inactive, Peter.

You are right in stating that the only way to make employees inactive in QuickBooks Online (QBO) is by terminating them. Once an employee is terminated, their status changes to inactive and they won't be included in future pay runs or subscription fees for the entire year. However, it's important to remember that employees can't be terminated until all their related pay runs are complete.

To terminate an employee, you can follow the steps below:

1. Select Employees from the left-hand menu.
2. Select the employee you wish to terminate.
3. Scroll to the bottom and select Terminate Employee 
4. Enter the Terminate Date and then select Terminate.

Additionally, you can refer to this article for more information and instructions on how to cancel a termination if you decide to reactivate a terminated employee: Terminate an Employee from within QuickBooks Online.

Lastly, I'll share this article in case you want to generate a report regarding any employee changes year-to-date (YTD) amounts previously reported to the Australian Taxation Office (ATO): Create and lodge an update event in QuickBooks Online.

Thank you for allowing me to assist you today, Peter. Feel free to revisit this thread if you've any more questions or need additional clarification about inactivating employees. We're always here to help.