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Termination payrolls: Basic information

Some states require that final paycheck be issued in person. To keep you compliant, all termination payrolls need to be issued by check and you will not have the option to pay with direct deposit. 

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.


  • Externally managed benefits: Automatically apply to the termination payroll.
  • Benefits managed by Gusto: The termination payroll will always include one pay-period's worth of deductions automatically.
    • Important: Gusto cannot prorate deductions. i.e An employee is dismissed on 1/15/18 and benefits continue through 2/01/18, our system will not capture the remaining deductions the EE owes for the second half of the month.
    • If you would like to apply additional 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. 

Follow these steps when you're ready to run a termination payroll.

Payroll, benefits, HR and more.