Even after an employee has left the business, they may be due additional payments such as holiday pay, bonuses, commissions, or any other type of pay. Once the P45 has been issued, HMRC's guidance is to apply a payment after leaving. This payment is subject to tax on a 0T M1 basis. A payslip is produced for the employee, and the payment after leaving is reported to HMRC on the FPS, with no need for a re-issued P45.
Feature Overview
✅ You can enable payment after leaving up to one month after their termination date.
✅ P45s are issued in the month that the employee's contract is terminated, and the payment after leaving is taxed using a 0T M1 tax code.
✅ You can enter a payment after leaving for any date in the future. The employee will receive a £0 payslip each month until the final payment is added.
❌ If the employee left more than 1 month ago and their status is 'archived', please contact us to enable 'payments after leaving' for you.
❌ If an employee’s status is ‘P11D only’, please contact us to enable 'payments after leaving' for you.
❌ It’s not possible to add payments after leaving in bulk.
Adding a payment after leaving with the contract termination
From the employee's record, choose the Employment tab.
Under the Contract section, click Terminate contract.
Enter the relevant reason for leaving and dates, then click Continue to termination payments.
Enter any relevant termination payments, then click Continue.
Under the 3. Payment After Leaving section, choose Yes, keep them in payroll.
Choose how many months to keep the employee on the payroll, then click Save.
This will keep the employee on payroll (with £0.00 payments) until the final month specified.
Adding a payment after leaving in the month after terminating the contract
From the employee's record, click the Employment tab.
Under the Contract section, click Edit termination details.
Click Continue to termination details at the bottom, then Continue.
Under the 3. Payment After Leaving section, select Yes, keep them in payroll.
Choose the number of months to keep the employee on the payroll, then click Save contract termination.
Toggle on the Enable payment after leaving option, then choose the Final date of payments.
Refresh your browser to see the employee's status change to Payment After Leaving.
FAQs
My employee is on maternity leave but is leaving the company, how can I ensure she is paid her statutory pay after she has left?
Admins should set the employee to 'payment after leaving' during the termination process with an end date at the end of the SMP pay period. This will keep the employee on payroll until the last month of their SMP, and the SMP payments due will automatically apply to their payslip.
What does the payslip look like if I don't add any additional payments for the employee in the subsequent months?
Employees with a payment after leaving status won't be paid a salary, so the payslip shows only £0 values until you add any additional payments.
When is the P45 issued to employees if I apply a payment after leaving?
The P45 is issued in the month that the employee leaves. Using HMRC's guidance, any payments processed after this, are taxed without freepay (0T M1) and no further P45 can be issued.