Dismiss and rehire US employees (for admins)

Expand the sections below to learn more.

Important: Dismissals cannot be undone. Make sure you want to end the team member’s employment and remove them from future payrolls before moving forward. Their info will remain in Gusto for records, taxes, and possible rehiring.

• If the employee is going on leave of absence, skip them in payroll instead of dismissing

• The steps below apply to both employees who resign and employees who are terminated

Final dismissal payroll deductions

• Externally managed benefits — apply automatically

• Gusto-managed benefits — one full pay period of deductions will always apply

  • Gusto cannot prorate deductions after. For example, if an employee is dismissed on Jan. 15 and benefits continue through Feb. 1, we will not capture the remaining deductions the employee owes for the second half of the month

  • To apply additional deductions, process the final pay as an off-cycle payroll and choose to apply them

• Severance pay — if marked as severance, 401(k) deductions (externally managed or integrated) will not apply

Before you start

Employees who were paid through Gusto can be dismissed but not fully deleted. Gusto needs to stay compliant in maintaining its payment records.

You can edit the dismissal details up until the person’s pay-through date. Their employment info will stay in your account to reference later. If they’re taking a leave of absence or on furlough, skip them on payroll instead of dismissing them.

Dismiss one employee

To dismiss one employee, follow these steps.

1. Sign in to Gusto.

2. In the left menu, click People.

3. Click the employee’s name, not the checkbox.

4. Under Information, click Work.

5. Find the Work section and click Dismiss.

6. (Optional) Enter their last working day. This is the last day they actually work. You can make changes to this date later.

7. Enter their pay-through date. This is the last day the person gets paid for. States use this date for benefits enrollment and termination compliance.

8. Tell us if the employee chose to leave. We will not report this anywhere, but we’ll save it for your records.

   • Tracking reasons that employees leave the company can be important later

   • For involuntary dismissals, employees can file for unemployment or COBRA and state continuation of health insurance, or assert unlawful termination

9. (Optional) Select a reason for dismissal.

10. (Optional) Enter the employee’s personal email address so they can sign in later for W-2s and paystubs.

11. (Optional) Add dismissal notes. Only admins with the right permissions will see these notes.

12. Click Save and continue.

13. Review the dismissal timeline and expectations.

14. Click Dismiss employee.

15. Once the employee is dismissed, a Dismissal payroll will populate. Follow the state requirements below for when the employee needs to be paid.

16. Complete the offboarding checklist (now or later in the Offboarding tab).

Dismiss multiple team members at the same time

You can dismiss multiple employees — or other team members, like contractors — at once. To dismiss multiple team members, follow these steps.

1. Go to People.

2. Click the checkbox next to the names of the team members you need to dismiss.

3. Click Actions.

4. Click Dismiss team members.

   • You can cancel the dismissal details and keep selected contractors’ current work contract, or rehire them at a future date with a new work contract. Their employment info will stay in your account to reference later

5. (Optional) Enter their last working day. This is the last day they actually work. You can make changes to this date later.

6. Enter their pay-through date. This is the last day the person gets paid for. States use this date for benefits enrollment and termination compliance.

7. Tell us if the employee chose to leave. We will not report this anywhere, but we’ll save it for your records.

8. (Optional) Select a reason for dismissal.

9. (Optional) Add dismissal notes. Only admins with the right permissions will see these notes.

10. Click Save and continue.

11. Select a method you’ll use to pay the final paycheck to the selected team members.

    • Dismissal payroll — use this if you need to pay final wages before the company’s next regular payday. There will be a separate record of the final payment. All selected team members will be removed from their last regular payroll cycle

    • Regular payroll — same as dismissal payrolls, except there will not be a separate record of the final payment and you cannot customize team members’ final payday (they will be paid on the regular payday)

    • I already paid them — non-Gusto payroll

12. Click Save and continue.

13. If you’re dismissing employees and contractors, enter contractor dismissal details (end date and note). If you’re not dismissing any contractors, disregard.

14. Click Save and continue.

15. Confirm the email address that members will use to sign in to Gusto after they’re dismissed.

16. Click Save and continue.

17. Review what happens between now and the last day of all selected members.

18. Click Dismiss # members.

After their last day, the team members will be moved from Active to Dismissed.

What to expect after dismissal

• We will not send any notifications to your employee about the dismissal. However, employees with an upcoming dismissal date who submit an expense will see this message — “Employee expense could not be saved. Offboarding employees cannot create new expenses. Please contact your manager or payroll admin to process any new expenses.”

• Your employee will know they were dismissed if they sign in to their Gusto account after their last day

Special cases

• To remove an employee who never started or was entered twice by mistake, message us from the in your account

• To remove a dismissal for any other reason, message us from the in your account

When an employee is dismissed, every state has its own rules about:

• When you must issue a final paycheck.

• Whether unused PTO must be paid.

Important: In some states, late payments can lead to penalties, damages, or even criminal consequences. Always review your state’s Department of Labor website.

If you have specific questions about a termination, work with an employment attorney.

See the table in this article for details by state.

Table last revised April 21, 2026.

State

Dismissal paycheck deadline(s)

Requirements for paying out unused vacation 

Additional information

Alabama

• No statute

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Alaska

• If the employee leaves involuntarily: Within 3 working days.

• If the employee leaves voluntarily: Next scheduled payday, that's at least 3 days after the employee gives notice.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Arizona

• If the employee leaves involuntarily: Within 7 working days or the next scheduled payday, whichever is sooner.

• If the employee leaves voluntarily: Next regular payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Arkansas

• If the employee leaves involuntarily:* Next scheduled payday. If payment is not made within seven days of that payday, the employer is liable for double the wages owed.

• If the employee leaves voluntarily: Next scheduled payday. 

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

California

• If the employee leaves involuntarily: Immediately.

• If the employee leaves voluntarily: Immediately if they give at least 72 hours of notice. The payment is due within 72 hours if no notice was given.

• Yes

• Employers are required to pay employees any accrued, unused vacation time upon termination.

Colorado

• If the employee leaves involuntarily: Immediately, with some exceptions.

• If the employee leaves voluntarily: Next regular payday.

• Yes

• Earned vacation time is considered wages required to be paid out upon termination.

Connecticut

• If the employee leaves involuntarily: Next business day.

• If the employee leaves voluntarily: Next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Delaware

• You're required to pay the employee on or before the next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Florida

• No statute

• No

• No state statute addresses payment of accrued vacation on termination.

Georgia

• No statute

• No 

• No state statute addresses payment of accrued vacation on termination.

Hawaii

• If the employee leaves involuntarily: You're required to pay the employee immediately or no later than the next working day.

• If the employee leaves voluntarily: You’re required to pay the employee on the last day of work if notice is given. If the employee resigns without notice, pay is due on the next regular payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Idaho

• If the employee leaves involuntarily: Next scheduled payday or within 10 business days, whichever is sooner.

  • If the employee makes a written request for earlier payment, within 48 hours (excluding weekends and holidays) of receiving the request.

• If the employee leaves voluntarily: Next scheduled payday or within 10 business days, whichever is sooner.

  • If the employee makes a written request for earlier payment, within 48 hours (excluding weekends and holidays) of receiving the request.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Illinois

• If the employee leaves involuntarily: Immediately if possible, but no later than the next scheduled payday.

• If the employee leaves voluntarily: Immediately if possible, but no later than the next scheduled payday.

• Yes

• An Illinois company cannot put into place a company policy that does not pay out PTO upon termination.

Indiana

• You're required to pay the employee by the next scheduled payday.

• Yes (unless otherwise stated)

• Accrued vacation pay is considered a form of compensation. An employee may be entitled to accrued unused vacation time if they've met any certain conditions of a company policy or employment contract. 

Iowa

• You're required to pay the employee on or before the company's next regular payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Kansas

• You're required to pay the employee on or before the company’s next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Kentucky

• You're required to pay the employee on the next scheduled payday, or within 14 days, whichever is later.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Louisiana

• You're required to pay the employee on the next scheduled payday or within 15 days, whichever is sooner.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination; however, earned vacation cannot be forfeited by policy.

Maine

• If you have more than 10 employees, you're required to pay the employee on or before the company's next regular payday.

• Yes

• You're required to pay out all unused PTO with their final paycheck.

Maryland

• If the employee leaves involuntarily: Next scheduled payday.

• If the employee leaves voluntarily: Next scheduled payday.

• Yes (unless otherwise stated)

• Employers are required to pay employees any accrued, unused vacation time upon termination unless the employer's written policy states that vacation time will be forfeited upon termination.

Massachusetts

• If the employee leaves involuntarily: You're required to pay the employee on their last day.

• If the employee leaves voluntarily: Next scheduled payday. 

• Yes

• Employers are required to pay employees any accrued, unused vacation time upon termination.

Michigan

• You're required to pay the employee on or before the company’s next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Minnesota

• If the employee leaves involuntarily: You're required to pay the employee within 24 hours of their demand for wages.

• If the employee leaves voluntarily: You're required to pay the employee by the next scheduled payday that's more than 5 days and less than 20 days from their last day.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Mississippi

• No statute

• No 

• No state statute addresses payment of accrued vacation on termination.

Missouri

• If the employee leaves involuntarily: You're required to pay the employee on their last day.

• If the employee leaves voluntarily: Next scheduled payday.

• No

• Employers are not required to pay employees for earned, unused vacation upon termination.

Montana

• If the employee leaves involuntarily: Immediately, unless you have a pre-existing written policy that extends the timing of final payment. The written policy cannot exceed the next scheduled payday or 15 days, whichever is earlier.

• If the employee leaves voluntarily: Next scheduled payday or 15 days, whichever is earlier.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Nebraska

• You're required to pay the employee on the company's next regular payday or within two weeks, whichever is sooner.

• Yes

• All earned and unused vacation and PTO benefits must be paid to the employee with their final wages.

Nevada

• If the employee leaves involuntarily: Immediately.

• If the employee leaves voluntarily: You must pay on either the next regular payday or within seven days after they resign (whichever is earlier).  

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

New Hampshire

• If the employee leaves involuntarily: Within 72 hours. 

• If the employee leaves voluntarily: Next scheduled payday. If the employee gives at least one pay period’s notice, then within 72 hours.

• No

• You can pay out unused PTO if you'd like, but you are not required to.

New Jersey

• If the employee leaves involuntarily: Next scheduled payday.

• If the employee leaves voluntarily: Next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

New Mexico

• If the employee leaves involuntarily: You're required to pay them within 5 days of their last day.

• If the employee leaves voluntarily: You're required to pay them on or before the company's next regular payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

New York

• You're required to pay the employee by the next scheduled payday.

• Yes

• An employer must pay the employee for accrued unused vacation if there's no written forfeit policy. 

North Carolina

• You're required to pay the employee by the next scheduled payday.

• Yes

• An employer must pay the employee for accrued unused vacation if there's no written forfeit policy.

North Dakota

• You're required to pay the employee by the next scheduled payday.

• Yes, in most cases

• Must pay accrued time off unless employee is leaving voluntary and all of the following apply:

  • Employee has been employed for less than 1 year.

  • Policy states that there's a limitation of pay of accrued time off.

  • The employee gave the employer less than 5 days verbal or written notice.

Ohio

• You're required to pay the employee by the next scheduled payday, or within 15 days, whichever is sooner. 

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Oklahoma

• You're required to pay the employee by the next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Oregon

• If the employee leaves involuntarily: You're required to pay them by the end of the next business day.

• If the employee leaves voluntarily: You're required to pay them on their last day if they quit with at least 48 hours' notice, unless that day is a weekend or holiday. In that case, their check is due on the next business day. If the employee quits with less than 48 hours' notice, then you’re required to pay them on the next scheduled payday or within 5 business days, whichever comes first.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination. 

Pennsylvania

• You're required to pay the employee by the next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Rhode Island

• You're required to pay the employee by the next scheduled payday. 

• No (unless otherwise stated)

• If the employee has been working for the company for at least one year, you're required to pay out all unused PTO with their final paycheck.

• If the employer closes, merges, sells, or moves the business out of state, they must pay all wages within 24 hours. If the employee has worked there for at least one year, the employer must also pay holiday pay, vacation pay (full or prorated), and any insurance benefits within 24 hours, if a written or verbal agreement or policy provides these benefits.

South Carolina

• If the employee leaves involuntarily: Next scheduled payday, but not to exceed 30 days.

• If the employee leaves voluntarily: Next scheduled payday, but not to exceed 30 days.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

South Dakota

• If the employee leaves involuntarily: Next scheduled payday.

• If the employee leaves voluntarily: Next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Tennessee

• If the employee leaves involuntarily: Next scheduled payday or within 21 days, whichever is later.

• If the employee leaves voluntarily: Next scheduled payday or within 21 days, whichever is later.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Texas

• If the employee leaves involuntarily: Within 6 calendar days.

• If the employee leaves voluntarily: Next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Utah

• If the employee leaves involuntarily: Within 24 hours.

  • There are some exceptions for commissions for a sales agent.

• If the employee leaves voluntarily: Next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination. 

Vermont

• If the employee leaves involuntarily: Within 72 hours.

• If the employee leaves voluntarily: Next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Virginia

• You're required to pay the employee by the next scheduled payday. 

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Washington

• If the employee leaves involuntarily: Next scheduled payday.

• If the employee leaves voluntarily: Next scheduled payday.

• There are some exceptions for specific industries.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Washington DC

• If the employee leaves involuntarily: You're required to pay them the day after their last day.

• If the employee leaves voluntarily: You're required to pay them on or before the company's next regular payday or within 7 days of their last day, whichever is sooner.

• Yes (unless otherwise stated)

• You're required to pay out all unused PTO with their final paycheck unless your company has a written policy that indicates unused PTO will not be paid out when an employee leaves the company.

West Virginia

• You're required to pay the employee by the next scheduled payday.

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

Wisconsin

• You're required to pay the employee by the next scheduled payday.

• Yes (unless otherwise stated)

• You're required to pay out unused PTO if your company's PTO policy does not include a written PTO forfeit policy. If your PTO policy includes forfeiture, then  you are not required to pay out unused PTO.

Wyoming

• You're required to pay the employee by the next scheduled payday. 

• No (unless otherwise stated)

• An employer’s policy or employee contract governs whether earned, unused vacation is paid upon termination.

What a furlough is

A furlough is a temporary, unpaid break from work. You use a furlough when business slows down or during an off-season — and you plan to bring the employee back later. This is different from an employee taking time off for personal or medical reasons.

How to furlough an employee in Gusto

In Gusto, we handle furloughs and leaves of absence the same way. To furlough an employee, skip them on payroll until they return to work. Do not dismiss them.

Benefits during a furlough (if you have Gusto-managed benefits)

A furlough does not end an employee's benefits. Each carrier has different rules about how long an employee can keep their health benefits while not actively working. Contact your carrier to stay compliant.

While an employee is on furlough or leave, you need to pay their full health insurance premium to the carrier — including the employee's share.

When the employee returns and gets paid through payroll, we will apply catch-up deductions to cover any missed benefits contributions.

Dismissing an employee who will not return

If an employee is not coming back, you can dismiss them in Gusto.

When you can make changes

You can change an employee’s dismissal details up until the original dismissal date passes.

• After the dismissal date, you can still edit some details — but only if the employee was not paid since dismissal

• If you cannot change the date or details yourself, message us from the in your account

Change dismissal details or cancel the dismissal

To change dismissal details or cancel the dismissal, follow these steps.

1. Sign in to Gusto.

2. In the left menu, click People.

3. Click the employee’s name, not the checkbox.

4. Under Information, click Work.

5. Find the Work section.

   • Admins with the right permissions can click Cancel to remove the planned dismissal

6. In the gray Pending box, click Edit and update the information you need to change. You can edit:

   • Last working date

   • Pay-through date

   • If they chose to leave

   • Dismissal reason

   • Email

   • Dismissal notes

7. Click Save.

When you dismiss an employee, you can choose to pay severance in their dismissal payroll (find the dismissal payroll in the Offboarding tab).

If you already ran the dismissal payroll but still need to pay severance—or another type of earning—you can run an off-cycle payroll from their profile.

Pay a dismissed employee after you've run the dismissal payroll

You must have the right admin permissions to run this payroll.

1. Sign in to Gusto.

2. In the left menu, click People.

3. Click the Dismissed tab.

4. Click the employee’s name.

5. Under Information, click Pay.

6. Scroll to the Recent paystubs section.

7. Click Run off-cycle payroll.

8. Click + Other Earnings.

9. Enter the work period.

10. Enter the payment date.

11. Choose how deductions and contributions should be handled. 

12. Review or edit tax withholding rates.

13. In the Hours and additional earnings section, click + Other Earnings. 

14. Scroll down and enter the severance amount in the Severance field. This option only shows if the employee has been dismissed.

    • Severance pay will not count toward an employee’s 401(k) if the plan is managed outside of Gusto or through an integrated provider.

15. (Optional) Click Add Personal Note to include a message about severance on the paystub.

16. Click Save & Continue.

17. Click Submit Payroll.

Admins with the right permissions can rehire dismissed employees in Gusto. If you do not see the rehire option, ask your company’s primary admin to help.

Important reminders

Form I-9 requirements for rehires

Gusto does not automatically notify you to fill out a new I-9 for rehired employees. A new I-9 is likely required for any of the following reasons:

• More than three years have passed since the original I-9 was completed

• The previous I-9 cannot be located or is incomplete

• The employee’s work authorization has expired and they are providing different types of documentation

Rehires need to complete Supplement B, Reverification and Rehire (formerly Section 3) if:

• Less than three years have passed since the original I-9 was completed

• The original I-9 is available and complete

• The employee’s work authorization is still valid or they’re providing updated documentation for the same type of authorization (like a renewed Employment Authorization Document (EAD) or driver’s license)

Other important reminders

• The rehire date will replace the employee’s original hire date

• Gusto does not support sending new hire letters, offer letters, or welcome letters to rehired employees

• If rehired in the same year, the employee will get one W-2 for all wages

• Rehires cannot be canceled. If you rehire by mistake, you’ll need to dismiss the employee again

• You cannot rehire someone as a contractor. Instead, add them as a contractor

• To convert a contractor into an employee, follow the steps in this article

Rehire an employee

To rehire an employee, follow these steps.

1. Sign in to Gusto.

2. In the left menu, click People.

3. Click the Dismissed tab.

4. Click the employee’s name, not the checkbox.

5. Under Information, click Work.

6. Find the Work section, and under Dismissal details, click + Rehire.

   • If the employee worked at your company before you joined Gusto, click Get started to enter their info

7. Enter the rehire date.

8. Choose the employee’s employment status from the dropdown.

9. Select the employee’s work location.

10. Choose whether you want Gusto to file a new hire report.

    • You need to submit a new hire report if the rehired employee was separated from your organization for at least 60 consecutive days. Generally, these reports should be sent within 20 days of their return-to-work date under federal law, although some states require shorter timeframes

11. Click Rehire Employee.

Recommended additional steps for rehires

1. Ask your new hire to review their W-4 form and tax selections.

2. Ask them to re-sign your employee handbook.

3. Confirm direct deposit banking instructions. If applicable, have them fill out a new Direct Deposit Authorization form.

4. Verify and update any changes to pay, job title, work location, home address, and other employee details.

5. If the employee was rehired within a certain timeframe, you’ll need to reinstate their paid time off (PTO) and paid sick leave balances. Learn more here.

6. Check for active support orders. Some states require reactivation of an Income Withholding for Support (IWO) order if you rehire the employee within a specific window, like 90 days.

Employers need to make these determinations for each rehire. The appropriate documentation needs to be done within 3 business days of the rehire date.

What happens after a rehire

The employee can sign in to their existing Gusto account (using the personal email in their profile) to confirm or update their information.

On the rehire date, Gusto will mark them as active and add them back to payroll.

If you rehire someone who left before your company joined Gusto, you’ll need to enter a few extra details during rehire.

Change a rehire date

To change the rehire date, message us from the in your account.