Answer
Employees can have different states in Lightning Payroll: Active, Inactive, Terminated and Deleted. Each is explained below.
Active — an active employee is currently working and being included in pays. This is the default state when you add an employee, indicated by the Active pay recipient? box being ticked under Employees >> Pay Settings >> Pay Rates. Active employees count towards the total employee number for your licence.
Inactive — an inactive employee has not been terminated but is not currently working or being included in pays. This is indicated by the Active pay recipient? box being unticked under Employees >> Pay Settings >> Pay Rates. Inactive employees still count towards the total employee number for your licence.
Terminated — a terminated employee has been officially terminated in the program. This is done during the employee's final pay in the Edit Pay screen by clicking Terminate Employee. Terminated employees appear in red in the Employees list once you tick Show Terminated Employees? above the list. Terminated employees do not count towards the total employee number for your licence. See here for more on terminating employees.
Deleted — a deleted employee has been completely removed from Lightning Payroll. If you delete an employee using the Actions button in the Employees section, all of their past and present data is removed, which is almost never needed. Deleted employees do not count towards the total employee number for your licence.
Note: deleting employees is not recommended. If an employee has left your company, terminate them through the Pays screen instead.
