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    Create termination paycheck

    Article ID: 1000694

    Overview

    This article describes how to create a final paycheck for a terminated employee.

    Termination checks are governed by a separate set of state rules indicating when employees must be paid when they separate from employment because of discharge, layoff, or resignation. These requirements guarantee employees receive all wages they have earned on, or soon after, their last day of employment. For additional information, contact your state regarding wage payment requirements for involuntary termination and/or voluntary resignation.

    Details

    Termination checks are subject to normal tax deductions, including state and federal taxes.

    • If you have Assisted Payroll, you will need to send termination check payrolls to Intuit for tax processing prior to your tax deposit schedule.
    • If you are paying the Termination check to your employee using Direct Deposit, you must send payroll to Intuit by 5:00 p.m. (Pacific time) 2 banking days prior to the check date. Intuit needs this time for processing in order for the Direct Deposit funds to post to your employee's account on the check date.

    QuickBooks will not warn or charge a late payroll processing fee as long as:
    • The employee has a release date in the employee record that matches the send date of the payroll (or an earlier date).
    • The paycheck date is today or later.
    For more information about late payrolls, see Processing a late payroll (backdating paychecks).

    To create a termination check:

    From the Payroll Center, click the Related Payroll Activities button and choose Create Termination Check.
    In QuickBooks 2014:  From the Payroll Center click the Pay Employees tab, at the bottom of the page, under Other Activities click Create Termination Check.

    In the Enter Payroll Information window, enter the Pay Period Ends and Check Date.  There will not be a late fee if the Check Date is dated today or a future date.

    Next to Bank Account confirm the correct bank is chosen.

    Place a checkmark next to the employee(s) to be paid a termination paycheck.

    Click in the Release Date column next to the employee. A Calendar icon will appear.

    Click the Calendar icon and select the employee release date.

    Enter the hours worked for each terminated employee or verify the Total Hours. To preview or modify paycheck details, follow steps below:

    1. Click on employee's name.
    2. From the Preview Paycheck window, enter or modify paycheck information.
      • If the employee uses Direct Deposit, verify that the Use Direct Deposit box is marked appropriately. If you do not want the paycheck to be direct deposit, click to clear Use Direct Deposit. (Most termination paychecks are live checks rather than Direct Deposit paychecks.)
      • If you do not want vacation and sick to accrue on this specific paycheck, check the box to Do Not Accrue Sick/Vac.
    3. Click Save and Next to proceed to the next employe or Save and Close to go back to the Enter Payroll Info window.
    4. Click OK to return to the Enter Hours screen.

    Click Continue.

    The Make Employees Inactive window will open. Click Make Inactive to make the employee inactive or Keep as Active to keep the employee on the active employee list.

    In the Review and Create Paychecks window, review the taxes, deductions, net pay, employer taxes and contributions. If the you wish to review or change these amounts, you can click the employee's name.

    Click Create Paychecks.

    The Confirmation and Next Steps window will open. Based on your payroll service, QuickBooks will provide you the next steps. If you have Assisted Payroll or use Direct Deposit, you will also be prompted to send your payroll to Intuit for processing.

    • If you are paying the Termination check to your employee using Direct Deposit, you must send payroll to Intuit by 5:00 p.m. (Pacific time) 2 banking days prior to the check date. Intuit needs this time for processing in order for the Direct Deposit funds to post to your employee's account on the check date.

    2 comments

    Hannah6/18/2013

    10

    Our paycheck are direct deposited, when processing termination checks, can it be sent to Intuit at the same time as regular payroll or does it have to be sent separately?

    Reply

    Haleigh7/18/2013

    123

    Hi Hannah,

    If the direct deposits and the termination checks have different check dates then yes you would want to send them separately.

    Haleigh

    Comments can not be added at this time.

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