Calculate final pay when a worker leaves
Deductions to make from outstanding pay owed when an employee leaves the business.
When a worker leaves your employment, you must give them:
- any outstanding pay, including overtime
- pay in lieu for any untaken holiday
- bonus payments, if earned
- any statutory sick pay, if they are entitled to it
- pay instead of notice if you do not require them to work their notice period - note that the contract of employment must provide for this, otherwise the employee must agree to it
- redundancy payment, if due
If the worker leaves before or during their statutory maternity or adoption pay period, you must also start paying - or continue to pay - them statutory maternity or adoption pay.
You could also give them:
- a pension refund, depending on the rules of the scheme
- a lump-sum payment as compensation for loss of their job
- an enhanced redundancy payment if you have made them redundant - this might be either contractual or paid on a discretionary, and non-discriminatory, case-by-case basis
What you should deduct from a worker's final pay
You must deduct the following items from what you owe the worker:
- income tax
- relevant National Insurance contributions
You might also need to consider deductions in respect of matters such as:
- money given for season ticket loans
- any other outstanding loans
- amounts to be paid under any car leasing agreements
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