Step-by-Step Guide to Process Leavers in Sage 50 Payroll

Updated On: April 15, 2025 5:07 am

As most business owners know, it is important to mark employees as leavers once they leave the company to ensure accurate final payments and Full Payment Submission (FPS). To do this, the user simply needs to provide the employee with a P45 and exclude them from any future payroll processing. Processing a leaver in Sage 50cloud Payroll is quite straightforward. In this article, we will go over the steps to properly process leavers in Sage 50 Payroll.

Process Leavers in Sage 50 Payroll

Summery:

When an employee leaves the organization, it is important to issue a P45. After updating their final payment and before submitting the FPS (Full Payment Submission), the user must mark the employee as a leaver. However, there are a few important things to consider before processing a leaver:

• Ensure the employee’s final pay includes all outstanding payments and deductions, such as overtime.
• If the employee has passed away, they are not subject to National Insurance (NI) on the final payment.
• Verify that the employee’s status is set to Director if applicable. If so, check the “Director” field when marking them as a leaver to ensure NI is calculated annually.
• Make sure the employee receives all statutory payments they are entitled to. For example, if the employee receives Statutory Maternity Pay (SMP) and leaves during the maternity period, they may still be eligible for the remainder of the entitlement.

Steps to Process a Single Leaver

Make a Single Employee a Leaver:

• Go to the Employees tab.
• Select the employee.
• Enter the employee’s Finish Date.
• In the Previous Tax Details section, set the Starting Basis to This is an existing employee.
• Click Save.

Steps to Process Multiple Leavers

Make Multiple Employees Leavers:

• Go to the Employees tab.
• Click Bulk Actions.
• Select the relevant employees in the Select Item column.
• Click Add Finish Date.
• Enter the finish date for all selected employees.
• Click Save.

The user can now process the employees’ final pay and issue their P45s. Once the next payroll has been run, the leaver cannot be reinstated.

Print the Leaver’s P45

Get the Leaver’s P45:

You must issue the employee’s P45 after processing their final pay.

• Go to the Employees tab.
• If you see the employee in the list, proceed to Step 5.
• Otherwise, click Filter.
• Tick the Include employees who have left checkbox and click Apply.
• Select the employee’s record.
• Click the Print P45 button at the top-right of the page.

Leaver’s Finish Date Before Last Payment

When the Leaver’s Finish Date Falls Before Their Last Payment Run:

If the leaver’s finish date is before the final pay run (e.g., finish date is 30th September, but payment is on 5th October), do not enter the finish date until after the pay run is complete:

• Complete the pay run.
• Go to the Employees tab.
• Select the employee.
• Enter the Finish Date.
• In the Previous Tax Details section, set the Starting Basis to This is an existing employee.
• Click Save.

You can now issue the employee’s P45. HMRC will be notified of the leaver during the next FPS.

Employee Leaves After Pay Run

If the Employee Leaves After the Payment Run:

If you’ve completed the final pay run and submitted the FPS for that period:

• Mark the employee as a leaver and click Save.
• Go back into the employee’s record and print their P45.
• Process the next pay run as normal.

HMRC will be informed of the leaver through the next FPS submission.

Marked as Leaver by Mistake

If an Employee is Marked as a Leaver by Mistake:

If you mistakenly mark an employee as a leaver but haven’t submitted the FPS yet, you can still reinstate their record:

• Go to the Employees tab.
• Select the employee you want to reactivate.
• In the Employment Details section, remove the date from the Finish Date field.
• Click Save.

If you have already submitted the FPS, the employee cannot be reinstated in the software. You must contact support to reactivate their record.

Mark Employee as Leaver & Print P45

Mark the Employee as a Leaver and Print the P45 in Sage 50:

Make sure the processing date is set to the employee’s leave date so the correct tax code appears on the P45. Follow these steps:

• Open Payroll.
• Select Change Process Date.
• Set the date to the employee’s leave date and click OK.
• Find and double-click on the relevant employee.
• Click the Employment button.
• Select Leaver, then click Next.
• Enter the employee’s leaving date.
• In the Stationery List, choose P45 – Plain Paper.
• Click Preview to review the report.
• Click Print, then OK.
• Click Close.
• Select Payroll again, and change the process date back to the current date.
• Click OK.

Also Read: Process Statutory Sick Pay (SSP) in Sage 50 Cloud Payroll

Final Words

So, there you have it—these are the key steps for processing leavers in Sage 50 Payroll. If you still have questions, feel free to visit us at accountingadvice.co, where you’ll find plenty of helpful resources.

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