Employee Termination in FreePayroll
To terminate an employee, follow these detailed steps:
Navigate to the People Section:
- Click on the People section in the main menu.
Select the Employee:
- Find the employee you wish to terminate.
- Click on the three dots ( ...) next to the employee's name.
- Select Edit to open the employee record.
Initiate Termination:
- Next to the employee's name in their record, click on the three dots ( ⋮).
- Choose Terminate Employment from the dropdown menu.
Set the Termination Date:
- A popup will appear asking for the termination date.
- Note: The termination date must be within the current pay period. If the date is for a future pay period, you must wait until that period begins. If the date is for a past pay period, you will need to rollback to that period.
Prorate Salary:
- Once you select the termination date, FreePayroll will automatically prorate the employee's salary for that period using the day rate method defined during the pay schedule setup.
Calculate Holiday Pay:
- The system will calculate if the employee is entitled to any holiday pay.
- Enter the number of holidays the employee is entitled to for the year, and how many days they have already taken.
- FreePayroll will display how many days are outstanding and the amount of holiday pay the employee is entitled to.
- If you do not want to provide this information, leave the values at zero, and no holiday pay will be paid.
This procedure ensures a seamless transition when terminating an employee's employment within FreePayroll UK, maintaining accuracy and compliance throughout the process.
- Adjust Prorate Amount (Optional):
- If you wish to pay a different amount than the prorated salary, you can adjust the final amount using a pay item.
- Downloading Employee P45:
- After HMRC confirms the FPS submission for the payroll, download the employee’s P45 from their profile for your records. You will be able to download it only after you completed the payroll successfully for the pay period in which the employee is terminated.
- Accidental Termination:
- In cases of mistakenly terminating an employee, please check our article on how to reinstate an employee.
- P45 to be sent to employees:
- FreePayroll for the time being does not send automatically via email the P45s to the terminated employees, so you will need to make sure to send the form to the workforce.
Navigate to the People Section:
- Click on the People section in the main menu.
Select the Employee:
- Find the employee you wish to terminate.
- Click on the three dots ( ...) next to the employee's name.
- Select Edit to open the employee record.
Initiate Termination:
- Next to the employee's name in their record, click on the three dots ( ⋮).
- Choose Terminate Employment from the dropdown menu.
Set the Termination Date:
- A popup will appear asking for the termination date.
- Note: The termination date must be within the current pay period. If the date is for a future pay period, you must wait until that period begins. If the date is for a past pay period, you will need to rollback to that period.
Prorate Salary:
- Once you select the termination date, FreePayroll will automatically prorate the employee's salary for that period using the day rate method defined during the pay schedule setup.
Calculate Holiday Pay:
- The system will calculate if the employee is entitled to any holiday pay.
- Enter the number of holidays the employee is entitled to for the year, and how many days they have already taken.
- FreePayroll will display how many days are outstanding and the amount of holiday pay the employee is entitled to.
- If you do not want to provide this information, leave the values at zero, and no holiday pay will be paid.
This procedure ensures a seamless transition when terminating an employee's employment within FreePayroll UK, maintaining accuracy and compliance throughout the process.
Important Points
- Adjust Prorate Amount (Optional):
- If you wish to pay a different amount than the prorated salary, you can adjust the final amount using a pay item.
- Downloading Employee P45:
- After HMRC confirms the FPS submission for the payroll, download the employee’s P45 from their profile for your records. You will be able to download it only after you completed the payroll successfully for the pay period in which the employee is terminated.
- Accidental Termination:
- In cases of mistakenly terminating an employee, please check our article on how to reinstate an employee.
- P45 to be sent to employees:
- FreePayroll for the time being does not send automatically via email the P45s to the terminated employees, so you will need to make sure to send the form to the workforce.
Updated on: 03/04/2025
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