How to create a final paycheck for a terminated employee

How to create a final paycheck for a terminated employee

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 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 the 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 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 US version of QuickBooks only:

  • If you have QB Desktop assisted, you will need to send 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 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.
  • 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 Check Date must be dated today or a future date.
  • Next, to Bank account 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 drop down.
  • 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 this steps:
    • First, click on employee’s name.
    • Go the Preview Paycheck window, type or adjust paycheck details.
      • If the worker uses Direct deposit, check that the use 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 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.

Need more help? Dial QuickBooks payroll customer service number +1-855-441-4417 for more information.

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