Dismiss your employee

If your employee is no longer with the company or will be leaving the company, dismiss them from your Gusto account. This will remove your employee from future payrolls. We will still retain their past payroll information for tax purposes and for generating their W-2 form at year end.

  1. Click the People tab.
  2. Click your employee’s name.
  3. Navigate to the Job & Pay tab.
  4. Click Dismiss Employee in the lower right corner of the screen.
  5. Enter your employee's last day.
  6. Select if you want to run a special termination payroll:
    • Yes, I want to run a special termination payroll in order to pay the employee their last check on the spot: Your employee will be paid with a check.
    • No, the employee agrees to be paid the rest of his wages on the company's normal pay schedule: Your employee can be paid with either a check or through direct deposit.
  7. Click Dismiss Employee.
  8. Pay the dismissed employee's last payment:
    • Run a special termination payroll if you selected to do so.
    • If you did not select to run a termination payroll, your employee's last payment will be included in the next regular payroll.
  9. We understand that this can be a sensitive matter. Once you have entered the dismissal details, no notifications will be sent to employees regarding their status change.

Note: If your health insurance benefits are managed by Gusto, we’ll automatically notify your insurance carriers when you dismiss your employee. Their coverage will end per the policy on file with your carrier. This is usually the end of the month, but could vary depending on your contract. We'll also send a COBRA Election notice to the dismissed employee three days after they're terminated to let them know about their continuation options.

Questions and Answers

Q: Do remaining vacation and sick hours pay out when an employee is dismissed?
A: When you select to run a special termination payroll, any remaining vacation hours will automatically pay out to your employee. Sick hours will not pay out.

Q: Will dismissed employees still be able to access their account?
A: Yes. Dismissed employees will have lifetime access as long as there is an email address associated with their Gusto account. They will always be able to review their paystubs and W-2s that were processed through Gusto. 



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