How Do I Process A Final Pay For A Departing Employee?

Lightning Payroll has a dedicated termination wizard that calculates the leave payout, applies the correct tax treatment to lump sum components, and adjusts KiwiSaver contributions for the final pay.

How to start a termination pay

1. Open the employee record and confirm the employment finish date.
2. Open Pays and add a new pay for the employee.
3. Tick the Terminate this employee option on the pay.
4. The termination wizard opens with the calculated payout components.

What the wizard calculates

• Unused annual holidays: cashed out at the higher of Average Weekly Earnings or Ordinary Weekly Pay.
• 8% accrual: 8% of gross earnings since the last anniversary, paid out as outstanding annual holidays.
• Unused alternative holidays: paid out at Relevant or Average Daily Pay.
• Payment in lieu of notice: entered manually when applicable.
• Redundancy or retirement payment: entered manually and taxed as an extra pay.
• Additional lump sum amounts: for ex gratia or other one-off items.

Before saving the pay

• Check the leave payout figures match what is owed under the Holidays Act.
• Make sure redundancy or retirement amounts are entered in the correct field so the right tax rule is used.
• Confirm KiwiSaver and ESCT lines reflect the final-pay treatment (see the redundancy KiwiSaver FAQ).

Once the wizard is complete, save the pay and print or email the payslip in the normal way.