Off-boarding Done Right: What’s Next After They Leave?

As much as we would love to think that our employees will stay with us forever, the simple truth is that even the most loyal employee will eventually seek greener pastures or decide it’s time to move on. Depending on the employee in question, we can dab our eyes and stare wistfully as they walk out the door, or, we can wave them goodbye whilst we all breathe a collective sigh of relief. Either way, once an employee leaves, there are a few payroll housekeeping tasks that you, as the employer, will need to complete.

Final pay and notice period

First things first, you’ll need to organise their final pay. You should take into account the date of the employee’s last day of work, any remaining holiday pay, salary, bonuses, or redundancy pay. If the employer refuses to work their notice period, you will not need to pay them for this time. However, should you choose to place an employee on gardening leave, you’ll need to pay them for the notice period.

Processing a leaver in your payroll software

Now, onto the technical side. Load up your payroll software of choice – for the purpose of this demonstration, I’ll be using BrightPay, and frankly, I don’t see why you would be using anything else (I’m not biased, I swear). Open up the payroll, go into the ‘employee’ tab, select the employee in question, select the ‘starter/leaver’ tab and enter the leave date. Save your changes and voila – easy as 123. You will need to do this before you update their final payment and submit the Full Payment Submission (FPS). The FPS is what will be sent to HMRC and will notify them that the employee has left the company.

Another way you can do this, and perhaps more efficiently, would be to go to the ‘payroll’ tab and finalise the payroll as you would normally by entering the final pay. But before you select ‘ok’, you can click on the ‘edit’ button next to the employee’s name and enter a leave date there.

Giving an employee their P45

An employee should be given a copy of their P45 as soon as they leave your employment. Luckily for you, BrightPay also has this covered. Within the ‘employees’ tab, select the employee from the list. Select ‘P45’ on the menu toolbar, and select which part of the P45 you wish to print, email or export and click ‘print review’. Select ‘print/email/export’ on the menu bar, as desired.

If an employee stops working for you, but is on statutory maternity, paternity or adoption pay, then you must continue paying it until the end of their statutory leave. You can either give them a P45 when they stop working for you, then deduct tax on the remaining statutory payments using code OT on a ‘week 1’ or ‘month 1’ basis, or you can use their usual tax code for the statutory payments and give them a P45 after you’ve made the final payment, recording the final payment date as their leaving date.

The last thing you need to do is to throw a party. Either to give them a good ol’ send-off and wish them well on their new ventures – or to celebrate the fact that they’re gone!!

This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.