What is the difference between changing an employee's status from "not on payroll" vs "terminated"?

I have an employed who resigned, last day was Oct 28/22.  When I go into QBO to terminate the employee it won't except the termination date - 10-28-22.  What am I doing wrong?

I want to make sure this gets sorted out,PSullivan.

Before we proceed, have you received any error messages changing the status of our employee? 

There are possible reasons why the date won't accept. 

• employees have remaining billable hours 
• Pending transactions that might involve after the date you terminate.
•  Paycheck and final paycheck on the last day of the termination date.

There are times that our browser stores frequently accessed data, thus causing websites to act weirdly just like having trouble changing the employee's status as terminated. To fix this, let's perform some troubleshooting steps.

First, let's try logging in to our QBO account using a private or a different browser. Here are the following keyboard shortcuts: 

• Google Chrome: Ctrl + Shift + N.
• Microsoft Edge: Ctrl + Shift + P.
• Firefox: Ctrl + Shift + P.
• Safari: Command + Shift + N.

Once done, we can go back to see if you are able to change your employee's status

If this works, it means that we need to clear the browser's cache so the system can start fresh. 

In addition to that, let me attach this link to help change your employees' status: Terminate or change your employee's status on the payroll.

We also offer several payroll reports that you can pull up to access your business and employee status. To view them, please visit our payroll reports page.

If we need further assistance with payroll tasks or managing your employee's status. Don't hesitate to get back on this thread. We're always here to help you.

Will I still have to pay quickbooks for employees that are "not on payroll" vs "terminated"?

Hi there, @electric123. Let me provide information about QuickBooks Online (QBO) payment and charges for employees. 

In QBO, the employees with a Terminated and Not on Payroll status will no longer show on your active payroll list. 

Also, as long as you're not processing a payroll check to that employee using QBO, you won't be able to get charged employee fees each month. Fees depend on the payroll service you use. 

I've added this reference that you can read to learn more about the services and fees for QBO Payroll: Understand service fees for QuickBooks Online Payroll.

If you have any other concerns if you have other concerns managing your payroll in QuickBooks. Have a good one and stay safe. 

I have an employee who has not returned to work and not informed us if/when he'll return. I don't know whether to change his status to "not on payroll" or "terminated." He will still receive 1 paycheck for the short time he worked this pay period... and he may show up. I haven't officially terminated him and I don't want him to view his profile in QBs and think he's been terminated. Can you tell me which is the better option?

Letting an employee go can be challenging, edinnen. I see how relevant business manpower is to help facilitate when running your business. Don't worry. I've come to provide what option can best rectify this concern and address employee status on your payroll.

If your employee has not yet returned to work, you can select the Not On Payroll option when you lay off or furlough a worker. You'll first need to create and give them their final paychecks to pay their time owed in your business. In this case, we can run an unscheduled payroll to provide your employee a paycheck outside the normal pay schedule. To do this:

1. Go to Payroll and click Employees.
2. From the Run payroll ▼ dropdown, select one of the following: Bonus only, Commission only, or Fringe benefits if you already selected one of these as the pay type.
3. Based on your selection you may be asked additional questions. Enter any info about taxes or paycheck calculations. Once complete, select Continue. 
4. Select or review the pay period (if applicable) and pay date. Then, select the employees you want to pay.
5. Select the column, or select Actions ⋮, then Edit paycheck to enter your pay details.
6. Under each employee’s name, select paper or direct deposit paycheck.
7. Click Preview Payroll and select or review the QuickBooks bank account to track your payroll.
8. Then, click Preview payroll details or Submit Payroll and select Close.

However, if an employee will no longer work for you, you can then modify its status as Terminated. Once dismissed, they will no longer appear on your active payroll lists. Even so, their profile and pay records remain in your accounts and still appear on reports. You may visit this guide for more detailed insights: Terminate or change your employee's status on payroll.

Moreover, I'm adding these references that may guide you in preparing year-end payroll and other tax forms and payments:

• Year-end checklist for QuickBooks Online Payroll.
• Pay and file payroll taxes and forms in QuickBooks Online Payroll.

We're looking forward to any additional queries you may have when handling employees in your account. Feel free to add a reply below, and we'll be sure to get you covered. Keep safe!

@SarahCO SaraCO,
I think your thoughts are 100% justified, the options are jarring and are very-much legally-formulated. So far everything I've read on this thread I would agree with (if I like it or not) after hearing out my own advisors. 
Everything you see below for status options is mostly formal and for a reporting and  an HR perspective to CYA. 

• Active - (actively paid employee)
• Paid leave of absence - (Employee is on leave, still being paid)
• Unpaid leave of absence - (Employee is on leave, no pay)
• Terminated - (Employment has ended)
• Not on payroll - (Employees   "on leave or temporary and likely to come back")
• Deceased - (Employment has ended - Deceased)
  
  
  Background; I found this thread because I searched "employee quit - how do I update status in QBO"
  @SarahCO you're not alone.