Dealing with leavers
If an employee leaves your company, you need to make them a leaver and provide them with a P45.
Simply enter their last working day before you complete their final pay run. Once you process their final pay, you can print their P45 and their leave date submits to HMRC on the full payment submission (FPS).
If you pay your employees in arrears, to ensure they appear on your pay run for the final payment, you need to enter the leave date after you process their payment.
For example, the employee is weekly paid and leaves on 21 November, but you need to pay them on 28 November. You should complete the pay run as normal on 28 November and then enter the leave date. When you submit the FPS for the following week, their leave date is included.
- 1. Go to the Employees tab, then click the button next to the relevant employee.
- 2. In the Last working day box, enter the last date on which the employee actually worked for the business.
You may have a scenario where the last working day occurs in a previous pay run. You still record it in the last pay run in which you’re paying the employee.
- 3. Click Save.
You’ve now marked the employee as a leaver. When you’re ready to do so, you can now process the employee’s final pay and generate their P45 information.
You can also mark an employee as a leaver by setting their finish date to the last date on which the employee actually worked for the business, when you edit the employee record.
Once you successfully submit an FPS to HMRC, the employee record becomes inactive. It’s not possible to edit any details or reinstate the employee.
You must print the P45 and give it to the leaver after you’ve completely processed their final pay in this employment.
- 1. Go to the Employees tab, then select the Include employees who have left check box.
- 2. Open the leaver’s employee record and click Print P45.
Depending on your Internet browser, the P45 report opens in a new window or tab. You can choose to print or save it from your browser file menu.
In the following example, the employee’s finish date is 3 February, and their final payment is 10 February:
- 1. Postpone setting their finish date until after the 10 February pay run is complete.
- 2. The FPS includes the employee’s 10 February pay information.
- 3. Mark the employee as a leaver, as explained above.
- 4. Complete the 17 February pay run.
- 5. The FPS includes the employee’s finish date.
HMRC now knows that the employee is a leaver, and also has all the necessary pay information.
Occasionally, an employee may notify you that they’re leaving the business after you’ve already processed their final pay run and submitted your full payment submission (FPS) to HMRC.
If this happens, you should mark the employee as a leaver as normal. When you process your next pay run, a correction to the earlier submitted FPS to HMRC is automatically sent, correctly notifying them of the leaver.
You may notice that an employee is still showing after you complete their final pay run and submit your FPS to HMRC. This happens if you enter the employee’s leave date after you complete the pay run.
If you’ve marked an employee as a leaver in error, you can reactivate their existing employee record. Once reinstated, they can begin to receive payslips again.
- 1. Go to the Employees tab, then select the Include Employees who have left check box.
- 2. Click the employee you want to reactivate.
- 3. Click Edit.
- 4. Under Employment Details, in the Finish Date box, remove the date.
- 5. Click Save.
If an employee dies, you must process their final pay with no NI deductions and notify HMRC that the employee no longer works for you. For more information about how to do this, please refer the article, How to process the final pay for an employee who has died.