If an employee doesn't earn any pay in one or more periods, you need to set their status to on hold.

When an employee is on hold, you need to let HMRC know with the full payment submission (FPS).

Put an employee on hold

Put the employee on hold status before processing payroll for the unpaid period

1. On the employee list, double-click the required employee.
2. Click the Employment tab.
3. In the Status drop-down list, select On Hold.
4. Click Save then click Close.

You need to select the Include? check box when you submit the first FPS after marking the employee as on hold.

 TIP: When submitting the Full payment submission, The on hold employee will show Yes under the Irregular column.

Change an employee's status to OK

When your employee has earnings you need to pay, change their status back to OK.

 NOTE: If you can't see the employee on your employee list, your criteria settings may be hiding them. Find out more in our employees or directors are missing from the employee list guide. 

1. On the employee list, double-click the required employee.
2. Click the Employment tab.
3. In the Status drop-down list, select OK.
4. Click Save then click OK.

If an employee is on hold and not updated for one pay period, you'll see this message in Enter Payments:

'Some of your selected employees have not been updated for the previous pay period. Your tax may be incorrect if you miss an update.'

This is correct, as you didn't pay the employee whilst they were on hold.

Employees on hold at Payroll year end

You can keep employees on hold while you process your year end. If you paid the employee in the tax year, they're included in your year end submission.

Produce a P60 for employee's on hold over year end.

New tax year

When you submit the first FPS in the new tax year, use the pre-submission checkboxes to include any employees who are in hold.

Full Payment Submission (FPS)

Each FPS you submit when an employee is on hold let's you select whether you include them in the submission.

Include the employee in the first submission you send, after you mark them as on hold. When you start to pay the employee again, process their pay and submit the FPS as normal.

Employee processed incorrectly

If a tax rebate occurred due to processing £0 gross pay, or you accidentally processed some gross pay and paid this to your employee, you need to correct it.

Use our guide to correct an overpayment for an employee on hold.