Remove an employee from your payroll when they leave your business

This article explains how to submit an employee’s leaving date to HMRC on an RTI submission when submitting their final salary.

When an employee leaves your business, you will need to submit their leaving date to HMRC and edit their final payslip to pro-rata their salary before filing the payroll. If a leaving date has been added and sent to HMRC in error, you can remove the leaving date as long as you do so before you file the next month’s payroll.

Please note:

  • FreeAgent's payroll functionality won't be available if you have an unincorporated landlord or non-UK account type, or if you're preparing your accounts using cash basis accounting.
     
  • You need to ensure that the details of each employee’s pay for the tax year is correct before adding the leaving date as you won’t be able to edit previous month’s payslips once the leaving date has been submitted to HMRC.
     
  • You’ll need full (level 8) access to FreeAgent to be able to edit a payroll profile and edit a payslip.

1. Enter a leaving date

First, you need to edit your employee’s payroll profile and enter a leaving date in.

Navigate to the ‘My Money’ tab at the top of the screen and select ‘Payroll’ from the drop-down menu.

Payroll highlighted in drop-down menu under My Money on the overview page.

In the ‘Employees’ section, select ‘Edit Profile’ to the right of the relevant employee’s name.

'Edit Profile' button highlighted next to employees' listings.

Scroll down to the ‘Leaving Details’ section and select ‘Yes’ to ‘Employee leaving during the next pay run?’. Then, enter their leaving date in the ‘Employee Leaving Date’ field and select ‘Update Payroll Profile’ at the bottom of the screen to complete the process.

Leaving details to input if employee is leaving during next pay run and leaving date.

Edit the payslip

If the employee will be receiving a different amount for their final salary, you'll need to edit their payslip and pro-rata their salary before filing the payroll to HMRC.

Navigate to the ‘My Money’ tab at the top of the screen and select ‘Payroll’ from the drop-down menu.

Payroll highlighted in drop-down menu under My Money on the overview page.

Select ‘Prepare Month [X] Payroll’ in the top-right of the screen. ‘X’ will be the number of the month for which you’re filing payroll.

'Prepare Month [x] Payroll' button highlighted on payroll page header.

Select ‘Edit Payslip’ to the right of the relevant employee’s name.

'Edit Payslip' button highlighted next to employee's listing.

Scroll down to the ‘Pay’ section and make the relevant changes.

Pay section of payslip.

Select ‘Save Changes’ at the bottom of the screen to complete the process.

You can then file the payroll to HMRC using FreeAgent or mark the payroll as filed if you’re filing outside of FreeAgent.

What happens next?

If you file the payroll to HMRC using FreeAgent, this will send the employee’s leaving date and final salary details to HMRC. If you mark the payroll as filed, you will need to send this information to HMRC outside of FreeAgent.

Once a leaving date has been entered into an employee’s payroll profile, they will no longer be included on your payroll and you’ll be able to access their P45 in FreeAgent.

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