When one of your employees leaves you will need to pay them their last wages, any holiday pay or statutory payments you owe them, issue them with a P45 and inform HMRC that they have left your employment.
You should start the process before you complete the final pay run for your employee. This can be up to 30 days before your employee is due to leave.
Select the employee from the Employee’s page and open the drop-down menu by clicking the hamburger in the top right of the screen. Select ‘End Employment’. Enter the leaving date and select I need to make a final payment to this employee.
When you complete the final pay run, the employee will be marked as a leaver. If your employee has not taken all the holiday that they have accrued during their employment, you will need to pay this to them as part of their final payment.
After you complete this pay run a P45 will be generated for your employee at the bottom of the employees page under Leaving Info.
You will need to give this to your employee as they will need to present it to their new employer.
When you submit your Full Payment Submission to HMRC your employee’s leaving date will be included.
My employee's name has disappeared. How do I find them?
If you have made someone a leaver and the date has passed, the employee's details move into the Leaver screen. Toggle the Filter button next to the search box, select Leavers and your employee will be shown.
What if my employee has already left?
If your employee has left your employment, for example they are a casual worker who does not return, you should still check you do not owe them any money and if so, follow the process above.
If you are confident you do not need to pay your employee again you can select ‘I will not pay this employee again’ on the leaver form.
In this case a P45 will be generated immediately for you to issue to your employee.
Your next RTI submission will include a zero payment for this employee showing the leaving date. This is to notify HMRC that the employment has ended.
What if my employee leaves at the beginning of a month, but I pay at the end of the month? Can I give them a P45?
The payment date is a contractual agreement between you and the employee but you can process the payment when they leave and create a P45 for them.
Add the employee to the pay run for the current month, keep the payment date the same, complete the pay run and submit an FPS for them. You will then be able to give them a P45 which will be at the bottom of their employment details page. The reasons for keeping a payment date the same are that if any employees are on universal credit they could be affected by an early payment date. Also for tax and NI purposes they are still entitled to have their pay based on the full month.
But how do I add my other employees at the end of the month?
When you go to sort out the other employees at the end of the month, you can reopen the pay run, add the employees, complete the pay run and a FPS for both those employees will be produced for you to submit as normal.
I've made my employee a leaver by mistake.
You can continue the employment if you have not given the employee a P45. Instead of end employment, there will be Continue Employment available.