We all are aware of the termination paycheck or final paycheck. Every employer has to give the final paycheck to their employees. The duration of time may vary as per the law your state has. As per the law of some states, you may even need to issue the paycheck on the final working day.

Final paycheck laws by a state may vary upon the case if the employee has been fired or they have quit themselves.

If you want to create a termination paycheck in QuickBooks then this blog is for you. There are different cases where you need to work accordingly. We have all discussed in this step-by-step guide. In case, you feel any discomfort following these steps, you are required to contact QuickBooks for help.

Termination Paychecks are controlled by a different set of state rules showing when a worker must be paid when they separate from the job because of discharge, layoff, or resignation.

All these rules and protocols ensure that employees collect all wages they have earned on, or soon after, their last day of employment. For more information, talk to your state or province regarding wage payment requirements for unconditioned termination or optional resignation.

Related article: How to Change Employee Payroll Information in QuickBooks

How to create a final paycheck for a terminated employee

This detail is for the US version of QuickBooks only:

If you have QB Desktop assisted, you will need to send a termination paycheck to Intuit for tax processing prior to your tax deposit schedule.

If you are paying the termination check to your employee using Direct Deposit, you must send payroll to Intuit by 5:00 PM(Pacific Time) 2 banking days prior to the check date.

Note: QB Desktop will not notify or demand a late payroll processing fee as long as:

The worker has a release date in the worker record that matches the send date of the payroll.

The paycheck date is today or later.

Follow the below steps to create final paycheck

Go to the Payroll Center , click the Pay Employees tab at the bottom of the page, under Other Activities click Create Termination Check.

, click the tab at the bottom of the page, under click After that, in the Enter Payroll Information window, enter the Pay Period Ends and Check Date . If you want to avoid a late fee, then the Check Date must be dated today or a future date.

window, enter the and . If you want to avoid a late fee, then the Check Date must be dated today or a future date. Next, to Bank account confirm the correct bank is selected.

confirm the correct bank is selected. After that, place a check-mark next to the employees to pay a termination paycheck.

After that, click in the Release Date column next to the employee. A calendar icon will display.

then, click on the calendar icon and choose the employee release date.

After that, choose the right reasoning from the ROE code dropdown.

After that, type the hours worked for each terminated employee or verify the Total Hours or Salary amount. To preview or adjust paycheck details, follow these steps: First, click on the employee’s name. Go the Preview Paycheck window , type or adjust paycheck details. If the worker uses a Direct deposit , check that the use of direct deposit box is marked appropriately. If you don’t want the paycheck to be direct deposit, click to clear use direct deposit . Most termination paychecks are live checks rather than direct deposit paychecks. If you don’t want vacation and sick to accrue on this specific paycheck, verify the box to do not accrue sick or vac . Select Save and Next to proceed to the next employee or save and close to go back to the Enter payroll Info window. Click OK to return to the Enter Hours screen.

Click continue .

. The Make employees inactive window will display. Choose to Make inactive to make the employee inactive or Keep as active to keep the worker on the active worker list.

In the review and create paychecks window, review the taxes, deductions, net pay, employer taxes, and contributions. If you wish to review or change these amounts, you can click the employee’s name.

Click to create paychecks.

After that, the confirmation and next steps window will open. Based on your payroll service, QB Desktop will give you the next steps. If you have QB Desktop Payroll Assisted. Or you use Direct Deposit. Then you will also be prompted to send your payroll to Intuit for processing. If you are paying the termination check to your worker using Direct Deposit, you must send payroll to Intuit by 5:00 PM(Pacific time) 2 banking days prior to the check date.



Steps To Pay the employee with a final paycheck

Follow these steps to pay the employees with a final paycheck. Go through these steps:

The first action is to go to the Employees and later choose run payroll

You have to choose the checkbox close to name of the employee that you are terminating

Insert all payment information for the final paycheck.

Here, you have to make sure that all other employees are unchecked.

Choose the Preview payroll.

Confirm all the information once, and later choose Submit payroll.

Now, select Finish payroll

Steps to Change the status of the employee

Follow these steps to change the status of the employee. Go through these steps:

In the left navigation bar, select on Employees option and search for the employee name and double-click on it.

Later, go to the pencil icon near to the Employment option.

From the Status drop-down list, you have to choose Terminated.

Click the Show in non-payroll lists checkbox if you don’t want the employee to appear in QuickBooks Online employee reports or lists.

If you do not want the employee to appear in the QuickBooks Online employee report or list, click Show in the checkbox for non-payroll lists.

Lastly, choose to Done

Steps to Remove the employee from the paid employees list

Follow these steps to remove the employee from the paid employees list, go with the following steps:

In the left navigation bar, select on Employees option and search for the employee name and then select Edit employees.

Click Employment at the top of the employee’s page.

From the Status drop-down, choose the Terminated.

You have to enter optionally, the Termination Date( the last working day of the employee).

Lastly, Choose to Done.

Go to the Employees option in the left navigation bar,

To change your view, you have to click on the drop-down arrow above your employee list. For instance, turn it from active employees to passive( Inactive) employees.

Hope the above-discussed steps will benefit you a lot in gaining knowledge about the employee’s paycheck. If you require any information related to this or if you have any questions related to this, you can contact our QuickBooks support team. You can reach us by dialing our toll-free+1-855-441-4417 and have a one-to-one conversation with our intuit certified Proadvisor.

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