Leaver's last pay date and leave date are in different tax years

Process a leaver when their leave date and last paid dates are in different tax years using Sage 50 Payroll.

Over payroll year end, sometimes an employee's leave date and last pay date are in different tax years. For example, the employee leaves in tax month 12 of the 2024/2025 tax year and receives their final pay in tax month 1 of 2025/2026.

You can process a leaver in this scenario before or after completing payroll year end. However, you must still complete your year end and send the year end submission by the deadline of 19 April 2024.

HMRC requires that the P45 shows the date that the employee left, with the Year To Date values as of their leave date falls in. 

Process the employee's final pay in 2025/2026 as normal then set the process date into the 2024/2025 and mark them as a leaver. Then, set the process date back into 2025/2026 to submit the full payment submission (FPS).

TIP: If a leaver doesn't appear on the Employee List at any point, check your Criteria options. For help with checking this, follow the show leavers on your employee list article.  

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Process the leaver

After you process the employee's final payments as normal and update records, continue to the steps below.

1. Process and update records for the employee's final pay period, but don't send the FPS yet.
   TIP: If you aren't paying an employee in the tax year their leave date falls in, update a period with £0 pay.
2. Click Payroll, then Change Process Date.
3. Set the process date to a date in the previous tax year.
4. On the employee list, click the required employee.
5. Follow the steps to make an employee a leaver and produce their P45.
6. In the Select your stationery drop-down, click the relevant P45 option then click Print then click OK.
7. Click Finish. The following message appears:
   • 'Employment end date falls before a later period which has already been updated. Do you want to continue?
8. Click Yes then click Save.
9. Click Close.

Next, set the process date to the date that you paid the employee in the 2025/2026 tax year, and submit the FPS.

The FPS submits both the date the employee left and the values from the 2025/2026 payment to HMRC. After HMRC receive the first FPS from any new employer, they'll let them know if they need to change the employee's tax code.

NOTE: If you spot that the P45 displays month number 1 but includes figures from the previous tax year, this is correct. This occurs because the employee received a payment in the new tax year but left during the previous tax year.

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