Having amazing employees is crucial to help you operate and grow your business. Most employees won’t stay with you forever, though. Whether an employee is terminated or they decide to move on to a different opportunity, you’ll still have to write them a final paycheck for the time they worked. And you typically have a tight deadline to get it done: either immediately or within a few days, depending on your state.
If calculating final pay sounds daunting, don’t worry. We designed a calculator that makes it easy to run an off-cycle paycheck for departing employees and meet your federal and state withholding tax requirements.
All you have to do is enter the employee’s gross wages earned during the final pay period, as well as their W-4 withholding information, and our calculator will do the rest of the work for you.
Please note that even if you had to fire an employee, you cannot make their final paycheck conditional or withhold any unpaid wages that they are due. Don’t forget to take into account any accrued vacation or sick days that the departing employee did not use because they may be entitled to a cash payout. Again, this depends on your state’s requirements, so it’s worth doing a little research — even in the case of termination.
Lastly, it’s important to get that due date for their final paycheck right. Although some states (looking at you New York) allow you to simply pay the departing employee at the next regular pay cycle, other states, like California, require you to pay a terminated employee immediately. Compliance here isn’t optional: if you don’t follow your state’s policy, you could end up getting sued or fined.
If you have additional questions about calculating payroll taxes, please visit our payroll calculators page for more information and links to payroll tax information for each state, or learn more about how to process payroll.