Run a termination payroll
After you have dismissed your employee in Gusto, you may be prompted to process a termination payroll to pay out their final wages.
- Navigate to the Run Payroll tab.
- Next to Special Payroll, select the termination payroll.
- Click Run Payroll.
- View the prorated payment, and enter any amounts for a bonus, severance, reimbursements or other additional earnings.
- Click Add Personal Note to include a message on the employee's paystub.
- Click Save & Continue.
- On the Vacation & Sicks Days screen, any remaining vacation hours are automatically prefilled for payout. If you wish to also pay out any remaining sick hours, add this amount here.
- Click Submit Payroll.
- Write the final amount on a check and hand it to your employee.
- Your employee will see this paystub in their Gusto account one day after their dismissal date.
Questions and answers
Q: Can I select to pay through direct deposit with a termination payroll?
A: No, you must pay the termination payroll via check.
Q: When can I run the termination payroll?
A: You can run the termination payroll at any time. If you run the termination payroll before the actual dismissal date, the employee will not receive an email notification from us about the payment.
Q: Can I apply deductions to the termination payroll?
A: Yes, externally managed benefits will automatically apply to the termination payroll. If your benefits are managed by Gusto, the termination payroll will not take out deductions automatically. If you would like to apply deductions, you will need to process the final payroll as an off-cycle payroll and click on the advanced settings and choose to apply deductions.