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How to Process Salaries for Terminated or Resigned Employees in a Separate Payroll Cycle

This article explains how to run a separate termination or resignation payroll cycle to process a departing (resigned) employee's final salary within the current payroll month — including what to do when a resigned employee still appears in payroll, whether to set the employment end date or keep the staff active, and how to pay a resignee's leftover claims or OT after they have left.

In this short video, you'll learn the complete steps for running a separate payroll cycle for terminated employees within the current payroll month.

This approach is particularly useful when you want to separate active employees in the default payroll cycle from those who have been terminated. By doing so, you can manage two distinct payroll cycles within the same month, ensuring accurate and streamlined processing for both active and inactive employees.

 

 

Common Issues / FAQ

Q: An employee resigned last month but still has claims/OT to pay this month — how?

A: Run an ad-hoc cycle and include the resigned employee by ticking 'Not in current month's payroll', then pay out the OT and claims for the resigned employee.

 

Q: How do I pay a final salary quickly after a resignation?

A: Pay through a normal payroll cycle — NOT an ad-hoc cycle (ad-hoc is for non-salary payments; a RM0 basic salary there is expected behaviour).

 

Q: Should I end the employment date or keep the employee active for the final run?

A: Setting the Employment End Date is the recommended approach; the employee is deactivated automatically once the date passes and still appears in the eligible cycle.

 

Q: What payroll item is Payment in Lieu of notice?

A: There is currently no default item for this — create a custom item, and check with the relevant statutory bodies to confirm the necessary contribution settings for the payroll item.

 

 

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