Terminate an employee

When you set an employee's employment status to Terminated, that employee will no longer appear in your active payroll, but the person's profile and pay records will remain in your account. Although you'll no longer be billed for that employee, any future-dated direct deposit will still process unless the paycheck is deleted.

A terminated employee who was never paid (or who was inadvertently set up) will be completely removed from your account. Follow these steps for the termination process.

  1. Pay the employee with a final paycheck.
    1. In the left navigation bar, click Employees.
    2. Click Run payroll.
    3. Select the checkbox next to name of the employee you're terminating and enter pay information for the final paycheck. Make sure that all other employees are unchecked.
    4. Click Preview payroll.
    5. Verify the information, and then click Submit payroll.
    6. Click Finish payroll.

    Employee's last day of work in the middle of the pay period? When you create the employee's termination check, be sure to select the entire pay period. Because of state and federal rules about tax withholding schedules, you cannot adjust the pay period end date to the employee's termination date.

  2. Change the status of the employee.
    1. In the left navigation bar, click Employees.
    2. Double-click the employee name.
    3. Click the pencil icon next to the Employment section.
    4. Select Terminated from the Status drop-down list.
    5. Click the Show in non-payroll lists checkbox if you don't want the employee to appear in QuickBooks Online employee reports or lists.
    6. Click Done.

    The employee's name will still appear in payroll reports, but will be marked with an asterisk to show the employee's terminated status.

    At year end, we'll prepare W-2 forms, file them with the government agencies, and mail them directly to the employees at the address in their QuickBooks Online Payroll Full Service employee profile. So be sure to verify the address and Social Security number for each employee you paid this year — active, inactive, and terminated.

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