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Deceased Employees

In the unfortunate event of an Employee's death, the following applies:

Treatment of NIC

If an Employee dies, different NIC treatment applies. No NIC contributions should be deducted from the Employee should a payment be made to them after the date of death. NIC contributions also cease for the Employer. For example, if date of death is recorded as 12/04/2012 and payment is made for the month on 26/04/2012, then no NIC should be deducted from that or any subsequent payment made in respect of the Employee.

Treatment of Tax

Tax should continue to be deducted as normal, however once the P45 has been generated, any subsequent payments should attract tax using an 0T tax code on a non-cumulative basis (i.e. week 1/ month 1 basis).

Treatment of Student Loan

HMRC ruling states that no student loan deductions are to be made from any payments after an employee dies. This applies even though the payment may relate to a period prior to death for example unpaid wages.

To mark an employee as deceased, select the employee and go to Leavers on the left hand menu. Ensure you select the option of Deceased.

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