Payroll - Payroll Leavers and Reinstatement

This guide addresses dealing with payroll leavers and covers the following;


When an Employee leaves, the date of leaving must be processed in the last FPS (Full Payment Submission) you send for that employee to HMRC. The following process will ensure that the submission is accurate.

Payroll Leaver Process Summary

Setting the Leaving Date

From the Manage Employees menu click on Payroll/Tax from the Action Menu for the relevant employee.

Personnel - Manage Employees - Action Box - Payroll/Tax

The employee payroll detail screen is displayed; select the Payroll Setup tab.

Do not change the Payroll Status but tick the Process as a leaver during the next pay run box. The status will be updated automatically after the payroll run.

A Leave Date box appears. If the date of leaving is the same as the payroll run date then leave the date field blank. If the leave date is different enter that date. For example the actual leaving date is the 25/02/2018 but the payroll will be run and paid as at the month end (28/02/2018)

Finally click SUBMIT to confirm and save.

The leaver can also be sent on the Quick Pay/Deduction screen.

Payroll - Quick Pay/Deduction - Tick Process as a leaver during the next pay run

Run the final payroll for the employee

If necessary, edit the final amounts due to the employee in the Pay screen for the employee.

Payroll - Manage Employees - Action Box - Pay and Deductions

Run the final payroll for the employee either as part of a normal payroll run or as an individual payroll. Note it is the responsibility of the user to make sure all appropriate payroll runs for the leaving employee have been run before the P45 is prepared.

The system has set the payroll status for the employee to Not on Payroll.

The date of leaving is also displayed on the employee details. The date cannot be edited as it has been submitted to HMRC.

Run the P45 report

Prepare the P45 for the employee from Payroll Reports

Payroll - Reports - Details of Employee Leaving Work (P45)

Select the relevant employee and click GENERATE to run the report. Note a warning is given.

Payments after leaving

If there are any payments to be made after the leaving date has been passed to HMRC then amend the Payroll Status to Active.

Payroll - Manage Employees - Action Box - Payroll/Tax

Process a payroll as normal. Payments will be reported in the FPS with a 'payment after leaving indicator' set. Finalising the Payroll resets the Payroll Status to Not on Payroll.

Reinstatement of a leaver

There may be occasions where an employee who has been processed as a leaver needs to be reinstated. Note reinstatement is not the same as re-employment.

Reinstatement will only be in the following circumstances: -

In all other circumstances they are being re-employed and need to be set up as such with prior pay and a new payroll reference number.

So the following guidance is for where Reinstatement applies only.

Reinstatement is launched from the employee details screen.

Payroll - Manage Employees - Action Box - Employee Details

A REINSTATE EMPLOYEE button is visible adjacent to the Employment Ended date field.

If the user is clear that reinstatement applies click the button. A message dialogue is displayed.

When ready dismiss the dialogue by REINSTATE button. The Employee is reinstated as if they had never left. The status may be inspected on the employee details screen.

The employment-ended date has been cleared and the user name and date of the reinstatement has been stored and is displayed.

If the employee was also a director when the leaving date was set, they are also reinstated as a director.

Where an FPS has been filed that indicated an employee had a leaving date set this will remain filed at HMRC however the next filed FPS will show new cumulative figures and that no leaving date is set for the employee. This is accepted by HMRC.

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