Creating a final pay for a departing employee
When your employee's period of employment ends, run a 'final pay' for them, which calculates and includes any leave owing (except sick leave). The employee is removed from your active employee list and their profile is archived.
We also inform the IRD that this person's employment with you has ended.
Select the employee for their final pay
Switch on the employee's timesheet as per normal. If other people are scheduled to be paid they can be added also and will not be affected by the terminated employees final pay status, once set.
Set up the timesheet
- Enter the standard hours for this employees last pay period (if any). Also check to confirm that the balance shown in the annual leave liability table is correct. (See the section below).
- Click 'Update and save'.
- Press the red button that says 'Make this [employee's name] final pay' to set the final pay. Follow the on screen prompts.
If an employee hasn't worked any hours and has no alternative leave owing, you can leave their timesheet blank. Click 'Update and save', and set their final pay.
If your employee is a contractor, or casual worker, without any leave balances, you'll still need to set a final pay to archive their profile.
Check employee's leave liability (for employees using 'Rate set as per the holidays act')
- Check to see how many allocated annual leave days are owing and the value of each day under 'rate:'
- Check the 8% figure here to see what leave has accrued since their last leave anniversary
- If an employee has any 'Alternative leave owing', you will need to add it to the timesheet and pay it out before the 'Final pay' can be set
- This is the total leave liability that will be paid to this employee upon setting the final pay
Pay out any 'Alternative leave days' (days in lieu)
As an example below, Helen needs to have her 'Alternative leave' day paid out. Scroll back up to the timesheet and follow the steps below:
- Add a row
- Set the pay type to 'Alt hol (-)'
- Enter the normal (or average) number of hours that would constitute a days work
- Update and save
- Click back into the 'Alt hol (-)' hour entry (inside the box where the hours are entered) to see the leave information for the amount being paid and the days being deducted.
- Make sure that the system is deducting the correct number of days here so that your alternative leave balance returns to zero
Set final pay
Click on 'Make this [--your employee's name--]s final pay'
Check the results
- Make sure the final pay has been triggered! You will see 'final pay' in the header.
- To make any amendments, simply click 'undo final pay'. Any amendments to the timesheet will undo the final pay and when you have finished making changes you will need to click on the final pay button again to reset it.
- Finally make sure you can see the leave paid out amount in the summary.
Your done! Now you can return to the dashboard. This employee's pay has been finalised and you will see a 'F' next to their name. After this pay they will no longer be available in the active employee list.
Processing a final pay with no pay types
There would be times when you might have to process a final pay for an employee without any pay types involved. This may happen if the employee left early or did not require to work the week before departing the organisation. This could also happen for employee's who may have left the organisation ages ago but the final pay may not have been processed and they may be owed holiday pay or leave pay.
The process for this remains the same but in the timesheet entry and reporting page, you will leave the pay type entry blank and just use the "Final Pay"button to set a final pay for that employee.
In the timesheet example above:
- The pay type defaults to "Standard Pay" .
- Remove any default hours or days that may have been pre-populated. If the boxes are empty, proceed to step 3.
- Make this the employee's final pay, a "final pay set"button will appear to confirm the pay has been set as a final pay.
- Pay summary will show "$0.00"for gross amount.
- The correct leave pay out amount will be displayed here according to the way the leave method has been set up for this employee.