Process final pay for a termination
When an employee leaves your organisation, you need to set their termination date and pay them their final pay including any unused leave. Only gross wages can be included in the final pay.
Before you start
- Approve any pending leave requests dated before the employee's termination date
- Reject any leave requests dated after the employee's termination date
- Make sure the employee's paid leave entitlements will be paid on termination
Process a normal termination in the final pay
- In the Payroll menu, select Pay Runs.
- Select the relevant draft pay run.
- Click the employee's name.
- Click Set as Final Pay at the bottom of the payslip.
Select the last day of their employment as the termination date, and click OK.Termination date must be before the end of the current pay period.
- Select Normal Termination.
- If the employee works irregular hours, manually enter the average earnings amount.
- Select the last full pay period with the employee's normal gross earnings.
- Outstanding wages for hours worked
- Accumulated leave for the final pay adjustment
Tax on unused leave included in final pay
When the pay run is posted, the termination date is applied to the employee's record in Xero. They’ll move to the History tab of your employees' list.