Terminating an Employee

To terminate an employee via the pay run you need to click on the employee within the pay run and then from the 'Actions' button select 'Terminate employee'.

A pop up will appear as follows:

From here you will need to enter the employee's termination date and the reason for the termination (this article will explain termination reasons further) before clicking 'Save'.

The employee's record will turn pink (as an indicator it is in termination mode) and will display calculated earnings and any accrued leave to be paid out as part of the termination pay.

With regards to the section on 'Leave Taken':

• Any leave category setup to be paid out on termination will automatically be calculated as part of the termination pay. If you do not wish for this to occur, deselect the 'Pay out' option;
• If you want to pay out a balance for an associated leave category that does not have the 'Pay out' option automatically selected, you will need to manually select this option;
• Any leave categories setup to not accrue automatically will not appear in this section.

For monthly employee, rate for leave pay-out upon termination is dependent on the business’ formula to calculate ordinary rate

For business using 26 days to calculate ordinary rate

Example: Employee works 8 hours per day, monthly salary is RM 5000. 

Daily rate: RM 5000 / 26  day

Hourly rate: Daily rate / 8 hours

For business using actual working days to calculate ordinary rate

Example: Employee works 8 hours per day and Standard days per week for the business is 5 days. System will count Monday to Friday as work days. The number of work days will change for each pay period. For period 01 /07/2023 to 31/07/2023, there are 21 work day. 

Daily rate: RM 5000 / 21  day

Hourly rate: Daily rate / 8 hours

For business using average working days to calculate ordinary rate

Example: Employee works 8 hours per day and Stand days per week for the business is 5 days. System will average number of work days in a month, i.e 5 days per week x 52 weeks / 12 months = 21.66667 days.

Daily rate: RM 5000 / 21.66667  day

Hourly rate: Daily rate / 8 hours

For employee with advanced work week, the calculation will be based on employee’s working pattern regardless of the business formula to calculate ordinary rate.

Once you have finalised the pay run, this employee will no longer be active or eligible to be included in future dated pay runs and the employee line will be highlighted red. If there are any unfinalised pay runs for the employee, you will not be able to terminate until those pay runs have been finalised. 

If the terminated employee is included in a pay run for their primary pay schedule dated before their termination date, they will be included with a red asterisk (*) next to their name. 

Cancelling a termination

If you want to cancel the termination in a pay run, click on the "Actions" box within the employee's pay details and then click on 'Cancel Termination':

If you want to re-activate an employee, you can do this by going to the employee's file 'Details' section.  At the bottom of the page, you will see a 'Re-Activate Employee' button. Clicking this button will bring up a pop-up box in which you need to click 'Activate' to confirm you wish to re-activate the employee thus making them eligible for pay runs.  Alternatively you can reactivate the employee using an import file.

2. Terminating an employee directly within the employee's file

Go to the employee's file, click on the 'Details' section.  At the bottom of the page, you will see a 'Terminate Employee' button. Clicking this button will bring up a pop-up box in which you need to enter the termination date. There will also be an option to select a termination reason (This article will explain termination reasons further).

From here, you can then select the 'Terminate' button which will terminate the employee and mark them as inactive.  This will mean that they are no longer eligible to be included in pay runs.

If you go to 'Data Extracts' from the payroll settings section and select the employee data, you can download a template with employee data (including terminated employees).  If the fields 'TerminationReason' (this article will explain termination reasons further) is selected along with the 'EndDate' input, when the file is imported into your business the employee will show as terminated. This will mark them as inactive and they will no longer be eligible to be included in pay runs.