Terminate or change your employee's status on payroll

Learn how to change the status of a terminated employee in QuickBooks Online Payroll. We'll also show you what to do if you lay off an employee.

Letting an employee go can be challenging. But it's important to take steps to keep your records accurate. After you give an employee their final payroll payment, go into your payroll system and change their employment status. Here’s how to change employee statuses from QuickBooks payroll product.

Step 1: Issue the final payroll payment

Create and give your employee their final payroll payment. Once you do, you can update their employment status.

Step 2: Change an employee status

Terminated employees no longer appear on your active payroll list. However, their profile and pay records remain in your accounts and still appear on reports.

Note: If you don't have payroll payments created or pay history added for an employee, you can also delete their profile from your payroll product.

1. Follow this link to complete the steps in product
2. Select your employee. If the employee isn't on the list, select All Employees from the Active Employees ▼ dropdown.
3. From Employment details, select Start or Edit.
4. From the Status ▼ dropdown, select Terminated or another appropriate status.
   Note: The Not on payroll option is used so customers won't be charged for an employee who isn't regularly paid, when moving from in-arrears to an active-employee billing model. This doesn't apply to employees on layoffs or furloughs.
5. Select Leave Date and Reason for status change.
6. Fill in any other required fields.
7. Select Save.