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Run a final paycheck for your employee

by Intuit•262• Updated 2 weeks ago

Find out how to create final paychecks in QuickBooks Payroll. When an employee no longer works for you, you need to give them their final paycheck for their remaining wages. 

Final paycheck guidelines

If you terminate an employee for any reason, including discharge, layoff, or resignation, you must pay them for all time owed on a final or termination paycheck.

  • Amount of pay: How much you pay depends on the agreement you have with your employees. You also need to follow state and federal tax laws.
  • Time off: The Fair Labor Standards Act (FLSA) doesn't require you to pay out vacation, sick leave, or holidays. However, your state might. 
  • Severance pay: This is a payment package you may offer based on your employee’s time of service and salary. The Fair Labor Standards Act (FLSA) doesn’t require severance pay. However, your state might have rules. 
  • Taxes: Final or severance paychecks are subject to all taxes. You may need to use the supplemental rate for severance pay.
  • State requirements: Reach out to your state agency for more info.

Create a final paycheck

Choose your payroll product below and follow the steps to create your employee’s final paycheck.

Note: Not sure which payroll service you have? Here's how to find your payroll service.

You have 2 ways to create a final paycheck in QuickBooks Online Payroll:

  • Scheduled payroll: Give the final paycheck as part of your regular payroll schedule.
  • Unscheduled payroll: Give the final paycheck outside your regular pay schedule.

For Unscheduled Payroll

Follow this link to complete the steps in product Open this link in a new window

  1. From the Run payroll â–Ľ dropdown, select one of the following: Bonus only, Commission only, or Fringe benefits.
  2. Enter any info about taxes or paycheck calculations (if applicable).
  3. Select Continue. 
  4. Select or review the pay period (if applicable) and pay date.
  5. Select the employees you want to pay.
  6. Select Actions â‹®, then Edit paycheck to enter your pay details.
  7. Under each employee’s name, select paper or direct deposit paycheck.
  8. Select Preview payroll.
  9. Select or review the QuickBooks bank account.
  10. Select Preview payroll details or Submit payroll.
  11. Select Close.
  12. Update your employee's status to remove them from payroll and billing.

For Scheduled Payroll

Follow this link to complete the steps in product Open this link in a new window

  1. Select Run Payroll.
  2. Select your desired payroll schedule, then Continue.
  3. Select the employee you want to pay.
  4. Select Actions â‹®, then Edit paycheck to enter your pay details. If you use QuickBooks Time select Review Approved Time.
  5. Under each employee’s name, select paper or direct deposit paycheck.
  6. Select Preview payroll.
  7. Select or review the QuickBooks bank account.
  8. Select Preview payroll details or Submit payroll.
  9. Select Close.
  10. Update your employee's status to remove them from payroll and billing.

In QuickBooks Desktop Payroll, use a termination paycheck.

Important: If you need to create a second paycheck for severance or other pay, choose Scheduled Payroll or Unscheduled Payroll first. Create that paycheck before creating the termination paycheck.

Create a termination check

  1. Go to Employees, then Pay Employees, and select Termination Check.
  2. Review the Pay Period Ends date, Check date, and the Bank account the payment comes from. Important: To avoid a late fee, date the check for today or a future date.
  3. Check the employee to pay.
  4. From the Release Date column, select the Calendar icon. Then select or enter the employee's release date. 
  5. Enter and review the hours or salary.
  6. Select Open Paycheck Detail.
  7. Check or uncheck the Use Direct Deposit check box. 
  8. To stop vacation or sick accrual, select the Do Not Accrue Sick/Vac checkbox.
  9. Select Save & Next to create a check for another employee. Or select Save & Close to go back to the Enter Payroll Information window.

Important: If you're using direct deposit to pay the termination check, you must send payroll to Intuit by 5 PM PT two banking days prior to the check date.

Now you can finish processing the paycheck:

  1. On the Enter Payroll Information window, select Continue.
  2. In the Make Employees Inactive window, select Make Inactive to remove the employee from future payrolls. 
  3. Review the amounts for each employee.
  4. Review the Check/Direct Deposit printing options.
  5. When you're ready, select Create Paychecks.

If you use QuickBooks Desktop Payroll Assisted or direct deposit

Follow the steps to send your payroll info and direct deposit paychecks to Intuit.

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