Termination Payroll

Termination Payroll allows you to process the final pay for employees leaving your organization. This includes handling their last pay check, unused vacation hours, severance pay, and any other final earnings. Zoho Spend ensures that the termination process is smooth, compliant, and accurate.

Terminate an Employee

Here’s how you can terminate an employee:

• Go to Employees under People on the left sidebar.
• Select the employee who is being terminated.
• Click More at the top right corner and select Terminate Employee. You’ll be redirected to the Terminate Employee page.
• Enter the employee’s Last Working Day.
• Enable Encash all unused vacation hours if you want to pay the employee for their unused vacation hours.
• Configure the pay date for the termination payroll:
  • Pay as per the regular pay schedule: The termination payroll will be processed based on the regular pay schedule.
  • Pay on a given date: Select a specific pay date for the termination payroll.
• Enter the employee’s Personal Email Address for future communications, as their work email may be inactive after termination.
• Click Proceed.
• Confirm your action by clicking Yes in the pop-up.

The employee will be terminated, and a termination payroll will be created for them. You can then proceed to add termination payroll details.

Add Termination Payroll Details

Here’s how you can add termination payroll details:

• Enter the employee’s Earning Hours for the primary job role on the Termination Payroll page.
• If the employee had worked on any other additional job roles:
  • Click + Add Additional Job Hours.
  • Choose the additional job role.
  • Enter the number of Regular (Applicable to all employees), Overtime (Applicable only to hourly employees), and/or Double Time (Applicable only to hourly employees) hours worked for that role.
• Enter the Paid Time Off information for the employee for the pay period.
  • Sick Hours: Enter the number of sick hours the employee availed during this pay period. Unused hours cannot be encashed.
  • Vacation Hours: Enter the number of vacation hours the employee availed during this pay period. Unused hours can be encashed if you enabled the option during termination.
• Add the Additional Earnings information.
  • Severance Pay: Enter the compensation amount for the employee.
  • Bonus: Enter the bonus amount for the employee.
  • Commission: Enter any commissions earned by the employee during the pay period.
• Click Save and Continue.

The payroll will be created in Draft status. Review the payroll details, make any necessary changes, and proceed to approval.

Submit and Approve the Termination Payroll

Here’s how you can approve or submit a payroll for approval:

• Go to Pay Runs under Payroll on the left sidebar.
• Click Process Pay Run.
• Depending on your role and permissions, follow one of these paths:
  • If you have approval permissions, click Submit and Approve at the top right corner.
  • If you do not have approval permissions, click Submit for Approval at the top right corner. An authorized user will then review and approve the payroll.

Once your termination payroll is approved, Zoho Spend will automatically deposit salaries into employees’ bank accounts on the scheduled pay date if you’ve set up Direct Deposit for your organization and employees. The applicable taxes will also be debited from your bank account and paid to the respective agencies.

Record Payment for the Termination Payroll

If you’re paying employees manually via check, cash, or other methods, you can mark the payment as recorded on the payday.

Here’s how you can record payment for a termination payroll:

• Go to Pay Runs under Payroll on the left sidebar.
• Open a payroll in the Payment Due status.
• Click Mark as Paid at the top right corner.
• In the pop-up that appears, select the Paid Through Account and Payment Mode.
• Enable Send pay stub notification email to all employees if you want to email the pay stub to your employees.
• Click Save.

The payroll will now be marked as Paid, and the applicable federal, state, and local taxes will be generated under the Taxes module.