Checklist for when one of your employees leaves your company

What to do when an employee leaves

When an employee hands in their notice there are a number of things that you as an employer need to do. We have put together a checklist to make the process easier and to ensure that you do not miss anything important.

For whatever reason the employee is leaving for and whatever they will be going on to do, you need to inform HM Revenue and Customs (HMRC) and make sure that you deduct and pay the correct amount of National Insurance and tax.

1. Calculate the employees remaining pay if they will not be completing the full period that they are usually paid for.

2. Calculate the employees remaining holiday in line with your company holiday entitlement and ensure that this is accounted for in their last salary payment.

3. Check to see if the employee owes the company any outstanding money for salary advances or loans.

4. Check to see if the employee has any outstanding expenses that need to be refunded back to them.

5. When processing their last salary payment you need to consider the tax year. If your employee’s leaving date is before the current tax year (the next 6th April), then you need to input their leaving date on your payroll software when you process the next payroll covering up to but not including 6th April. Which will be the relevant month in the current tax year up to month 12.

6. If the employee’s leaving date is in the next tax year (on or after the next 6th April) but they will be paid before the 6th April then you need to input their leaving date in the following payroll that starts after the 6th April. Which will be Month 1 of the new tax year. So that you correctly submit their payroll information on the right FPS that gets submitted to HMRC.

7. You need to issue a P45 when you process their last salary payment. You are obliged to issue the employee a P45 and ensure that you and the employee have a copy of the P45.

Once those steps are completed above and you have made the last salary payment then that is all that needs to be done.

How our Beckenham Bookkeepers can help you

If you are the owner of a limited company, we can help you with all of your bookkeeping, VAT and payroll needs.

With over 25 years of accountancy experience, our bookkeepers in Beckenham can help save you time and money by keeping all of your books up to date, accurate and provide you with helpful financial information each month saving you the headache of working everything out yourself.

By taking care of your Bookkeeping, VAT and payroll we will make sure that you are compliant with HMRC and Companies House. We will also deal with your tax accountants at year-end to save you time.

Find out more about our bookkeeping services or to book a free initial no-obligation consultation, please contact our Beckenham bookkeepers to get the ball rolling.