Create final paychecks for terminated employees

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

• Make the final paycheck their last regular paycheck (also known as a scheduled payroll), or 
• Provide the employee a paycheck outside the normal pay schedule (an unscheduled payroll).

Follow these steps for whichever type you want to create.

For Unscheduled Payroll

1. Go to Payroll, then Employees (Take me there).
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 (if applicable). Once complete, select Continue. 
4. Select or review the pay period (if applicable) and pay date.
5. Select the employees you want to pay.
6. Select the column, or select Actions ⋮, 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 to track your payroll.
10. Select Preview payroll details or Submit payroll.
11. Select Close.

To remove the employee from your active employee list so you don’t get billed for them anymore, update their employee status.

For Scheduled Payroll

1. Go to Payroll, then Employees (Take me there).
2. Select Run Payroll.
3. Select your desired payroll schedule, then Continue.
4. Select the employee you want to pay.
5. Select the column, or select Actions ⋮, then Edit paycheck to enter your pay details. You can enter their hours, compensation, memos, or any other necessary paycheck info. If you use QuickBooks Time select Review Approved Time.
6. Under each employee’s name, select paper or direct deposit paycheck.
7. Select Preview payroll.
8. Select or review the QuickBooks bank account to track your payroll.
9. Select Preview payroll details or Submit payroll.
10. Select Close.

To remove the employee from your active employee list so you don’t get billed for them anymore, update their employee status.

In QuickBooks Desktop payroll, there's a specific termination paycheck type.

Important: If you need to create a second paycheck (to cover things like a separate check for severance pay), choose Scheduled Payroll or Unscheduled Payroll first. Create these types of paychecks before creating the termination paycheck.

1. From the Employees menu, select Pay Employees and then 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. Put a checkmark next to the employees you need to give a termination paycheck to.

Next, create a termination check:

1. Under the Release Date column, select the Calendar icon. Then select the employee's release date. Or enter the employee's release date.
2. Enter and review the hours or salary.
3. Select Open Paycheck Detail to review the paycheck details.
4. If you want to send the check as a direct deposit, select and check the Use Direct Deposit checkbox. If you don't want the paycheck to be a direct deposit, select and uncheck the option.
5. If you don't want vacation or sick time to accrue for this specific paycheck, select the Do Not Accrue Sick/Vac checkbox.
6. When you're done, 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 5:00 p.m. 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 make the employee inactive. They won't show up on payroll anymore. Or select Keep as Active.
3. Review the amounts for each employee.
4. Review the Check/Direct Deposit printing options.
5. When you're ready, select Create Paychecks.

For QuickBooks Desktop Payroll Assisted users, or if you send checks by direct deposit

If you have QuickBooks Desktop Payroll Assisted or use direct deposit, follow the steps to send your payroll information and direct deposit paychecks to Intuit.