When an employee resigns on good standings (NOT terminated by the company), do we reclassify them as 'terminated' or something else in 'employee status'?

Hello @gooz123,

You can change your employee status to "Not On Payroll". This status is used if you layoff or furlough an employee. Let me walk you through the steps.

1. Go to Payroll, then Employees.
2. Select the employee's name then Edit employee.
3. Click the Employment tab, then choose Not on Payroll under Status.
4. Hit Done.

That'll do it. Please see this article for details about changing employee status at this link: Terminate or change employee status payroll.

You can also visit our page about employees and payroll taxes. I'm sure you'll find this page helpful; it has links and steps for payroll-related issues.

Don't hesitate to comment below if you need help with anything else. I'll be around to assist you further. Thanks for posting and have a great day ahead.

Thank you very much for your reply. I truly appreciate your efforts.

My concern is that the ex-employee is NOT a layoff or furloughed employee, but they formally resigned for other reasons (such as moving, finding another job or traveling around the world).

If we layoff or furlough an employee, they could still qualify for us to pay unemployment if they file. This is not the case.

The majority of our employees leave on great terms. They normally just have a new chapter in their life.

If I mark 'Terminated', doesn't this imply they were fired by us?

If I only mark 'Not on Payroll', doesn't this imply they were a layoff or furlough?

How do we handle employees who voluntarily leave/resign on good terms but are not qualified for unemployment? (and for that matter, why is this topic not clearly defined by the Quickbooks Payroll team. The community shouldn't need to do this.)

So to be clear, this question excludes anyone whom we have terminated for cause, layoff or put on furlough. Any clarification/guidance by the community is greatly appreciated. THANK YOU!!!

You’re most welcome, @gooz123. 

Let me clarify some details about changing employee status in QuickBooks.

Yes, you’re right. If you choose Not On Payroll, it remains on your account and still showing on the reports. And there’s a tendency your employee still qualified to file unemployment.

Tagging employees as terminated doesn’t mean you fired them, it's a way so they'll no longer appear on your payroll list.

You can mark him/her as Terminated to avoid any charges connected to that employee in the future. You can also delete their profile from your payroll product. You’ll want to create their final paycheck first before updating their status for compliance with tax laws and to ensure payroll reporting is accurate.

Please see this article for more information: Create final paychecks for terminated employees.

You can also visit the link provided by my peer to learn more about employees and payroll-related concerns. You can select each to view them.

We’re always here ready to help whenever you have a concern with QuickBooks. Take good care.