How to Create & Run a Final Paycheck for a Terminated Employee in QuickBooks

Eager to know how to create & run final paychecks for a terminated employee in QuickBooks? In this article we have discussed the steps to process with ease, if you are looking for a solution then this blog is for you. There are different cases where you need to work accordingly. We have discussed all this in this step-by-step guide. Go through the article and get your issue resolved & learn to create and run a final paycheck for a terminated employee in QB. For more info contact our QuickBooks ProAdvisor toll-free: +1-844-405-0904

We all are aware of the termination paycheck or final paycheck. Every employer has to give the final paycheck to their employees. The duration of time may vary as per the law your state has. As per the law of some states, you may even need to issue the paycheck on the final working day.

Final paycheck laws by a state may vary on the case if the employee has been fired or they have quit themselves.

Termination Paychecks are controlled by a different set of state rules showing when a worker must be paid when they separate from the job because of discharge, layoff, or resignation.

All these rules and protocols ensure that employees collect all wages they have earned on, or soon after, their last day of employment. For more information, talk to your state or province regarding wage payment requirements for unconditioned termination or optional resignation.

Follow the below steps to create the final paycheck for a terminated Employee in QuickBooks

Steps for QuickBooks Online Payroll

If you are using the QuickBooks Online Payroll, then you have two options to create final paychecks, scheduled or unscheduled final paycheck. Go with the below steps for whichever type you need to create.

For Unscheduled Payroll

• First, you need to click on the Workers or Payroll menu, and next look for the Employees tab and click on it.
• Go to the ▼ dropdown and now you have to select one of the following: Bonus only, Commission only, or Fringe benefits if you previously chose one of these as the payment type.
• Click on As net pay if you know the correct amount you require to pay the employee. Unless click on As gross pay.
• Insert any additional info about taxes or paycheck calculations.
• Click on the bank account that you use in QuickBooks to trace this type of payroll transaction. Also, examine the pay period and pay date.
• Now, you need to choose the employees that you want to pay.
• Insert their hours, compensation, memos, or other essential paycheck information.
• Below the Pay Method for every employee, click on the link to select a paper or direct deposit paycheck.
• Click on the Preview payroll.
• Later, click n the Preview payroll details to analyze the details. Then choose Save for later or you can also Submit payroll.
• When you are all set, click on Finish Payroll.

Once you make the employee’s final paycheck, update their employee status. This removes them from your current employee list so that you do not bill for them anymore.

For Scheduled Payroll

• First, you need to click on the Workers or Payroll menu, and next look for the Employees tab and click on it.
• Next, click on Run Payroll. If you already have a payroll schedule, click on it and then choose Continue.
• Choose the bank account that you use in QuickBooks to track this type of payroll transaction. Also, reexamine the pay period and pay date.
• Choose the employee for which you want to pay.
• Insert their hours, compensation, memos, or any other essential paycheck information.
• Below the Pay Method for every employee, click on the link to select a paper or direct deposit paycheck.
• Click on the Preview payroll.
• Later, click on the Preview payroll details to analyze the details. Then choose Save for later or you can also Submit payroll.
• When you are all set, click on Finish Payroll.

Once you make the employee’s final paycheck, update their employee status. This removes them from your current employee list so that you do not bill for them anymore.

Steps for QuickBooks Desktop Payroll

There is a specific termination paycheck type in QuickBooks Desktop payroll.

Important: If you want to make a second salary to include things like a separate check for separate pay), choose a previously scheduled payroll or an unscheduled payroll. Make this type of paycheck before making an end paycheck.

1. From the Employees menu, select Pay Employees and then Termination Check.
2. Review the Pay Period Ends date, Check the date, and the Bank Account the payment comes from. Important: To avoid a late fee, check the date 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. Click on Open Paycheck Detail to evaluate the paycheck details.
4. If you require to send the check as a direct deposit, choose and checkmark the Use Direct Deposit checkbox. If you do not require the paycheck to be a direct deposit, then choose and uncheck the option.
5. If you do not need vacation or sick time to accumulate for this particular paycheck, then click on the Do Not Accrue Sick/Vac checkbox.
6. When you finish the above steps, click on Save & Next to generate a check for another employee. Or click on Save & Close to go back to the insert Payroll Information window.

Important: If you are using a direct deposit to pay a termination check, you will need to send the payroll to Intuit by 5:00 pm. PT two days before the check date.

Here are the steps to finish processing the paycheck:

1. Go to the Enter Payroll Information window, and click on Continue.
2. In the Make Employees Inactive window, go to Make Inactive to make the employee inactive. They will not show up on payroll anymore. Or click on Keep as Active.
3. Examine the amounts for every employee.
4. Review the Check/Direct Deposit printing options.
5. When you are finished, click on Create Paychecks.

Steps for Intuit Online Payroll

In Intuit Online Payroll you can make regular, bonus, commission, or fringe final paychecks.

• First, click on the Payday tab and then click on the pay schedule.
• Next, click on the type of check that you are creating from the Check Type field. If you need to run a scheduled payroll, then click on Regular Check. For unscheduled payroll (with a separate check for severance pay), click on Bonus Checks, Commission, or Fringe benefits. Then you need to enter the extra info about taxes or paycheck calculations.
• When you choose the check type, then click on Go.
• Click on the employees that you want to pay.
• Insert their hours, compensation, memos, or any other essential paycheck info, including whether the paycheck must be a paper or direct deposit.
• Now, click on Create Paychecks.
• Reexamine the amounts and payment methods.
• When you are completed, click on the Approve Paychecks.

Steps To Pay the employee with a final paycheck

Follow these steps to pay the employees with a final paycheck. Go through these steps:

• The first action is to go to the Employees and later choose run payroll.
• You have to choose the checkbox close to the name of the employee that you are terminating.
• Insert all payment information for the final paycheck.
• Here, you have to make sure that all other employees are unchecked.
• Choose the Preview payroll.
• Confirm all the information once, and later choose Submit payroll.
• Now, select Finish payroll.

Steps to Change the status of the employee

Follow these steps to change the status of the employee. Go through these steps:

• In the left navigation bar, select on Employees option and search for the employee name, and double-click on it.
• Later, go to the pencil icon near the Employment option.
• From the Status drop-down list, you have to choose Terminated.
• Click the Show in non-payroll lists checkbox if you don’t want the employee to appear in QuickBooks Online employee reports or lists.
• If you do not want the employee to appear in the QuickBooks Online employee report or list, click Show in the checkbox for non-payroll lists.
• Lastly, choose to Done.

Steps to Remove the employee from the paid employees list

Follow these steps to remove the employee from the paid employees list, go with the following steps:

• In the left navigation bar, select on Employees option and search for the employee name and then select Edit employees.
• Click Employment at the top of the employee’s page.
• From the Status drop-down, choose Terminated.
• You have to enter optionally, the Termination Date (the last working day of the employee).
• Lastly, Choose to Done.

• Go to the Employees option in the left navigation bar,
• To change your view, you have to click on the drop-down arrow above your employee list. For instance, turn it from active employees to passive (Inactive) employees.

Hope the above-discussed steps will benefit you a lot in gaining knowledge about the employee’s paycheck. If you require any information related to this or if you have any questions related to this, you can contact our QuickBooks support team. You can reach us by dialing our toll-free+1-844-405-0904 and have a one-to-one conversation with our intuit certified Proadvisor.