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Processing leavers

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Summary

How to make an employee a leaver in Sage Payroll. Use this article when an employee is leaving or retiring, not when you need to pay them after they have left.

Description

When an employee leaves your company, you must notify HMRC and provide them with a P45. Also ensure that they’re excluded from any future payroll processing. To do this, you need to make them a leaver.

CAUTION:

Don't change the employee to 0T Week1/Month1 for final pay when they’re leaving. Use 0T Week1/Month1 only for payments made after the employee has already left.

Resolution

Before you continue

Whether you make the employee a leaver before processing their final pay or not depends on their leave date:

  • When the leave date is in the same tax period as their final pay or a later tax period, then you can make them a leaver before processing the final pay
  • When the leave date is in an earlier tax period than the final pay, make them a leaver after processing the final pay. Otherwise the employee won't show when you come to process their final payment
▼Click here to find out more about tax periods
  • If you process a monthly payroll, the tax periods run the 6th to 5th of the following month
  • If you process a weekly payroll, these run from a Monday to Sunday

Check for examples in the table below and use our 26/27 tax calendar for support:

Pay frequency First period of the tax year
Weekly 6 April - 12 April
Two-weekly 6 April - 19 April
Four-weekly 6 April - 3 May
Monthly 6 April - 5 May

 

 

For example, if a monthly employee leaves on 5 May (tax month 1) and their final pay date is 25 May (tax month 2) then you must wait to make them a leaver until after you've processed their final pay in May. Your next FPS for June will then inform HMRC they're a leaver.

NOTE:

If you pay your employee in arrears, enter their leave date after you process their final payment. This ensures they appear on your pay run. The next Full Payment Submission (FPS) includes their leaver information.

 

If you need to make a final payment to the employee, ensure they’re present in the pay run. If they’re missing, their leave date falls before your selected pay date. Read Processing leavers FAQs for more information.

Make an employee a leaver

You can either process an individual employee as a leaver or do it in bulk. 

Make a single employee a leaver

  1. Select Employees from the menu bar.
  2. Select the relevant employee.
  3. Under Employment Details, enter the employee Finish Date.
  4. In the Previous Tax Details section, set the Starting Basis to This is an existing employee.
  5. Select Save.

You can now get their P45. Once you run the next payroll, you can't reinstate your leavers.

Make multiple employees leavers

  1. Select Employees from the menu bar.
  2. Select Bulk actions.
  3. Select the relevant employees in the Select Item column.
  4. Select Add finish date.
  5. Enter the Finish date for all your chosen employees.
  6. Select Save.

You can now get their P45. Once you run the next payroll, you can't reinstate your leavers.

NOTE:

If the employee was in your workplace pension scheme, tell the pension provider they have left.

Generate a P45

Give the leaver their P45 after you’ve processed their final pay in this employment. For more information, read Export or print the P45.

Frequently asked questions

For a list of questions and scenarios relating to making an employee a leaver, read the Processing leavers FAQs.

For a list of questions and scenarios relating to making an employee a leaver, read our Processing leavers FAQs.