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A
ALKS
July 29, 2020
Solved

How do I make a redundancy payment in QBO Advanced Payroll?

  • July 29, 2020
  • 2 replies
  • 0 views

I have a leaver in the next pay run who I have terminated and turned red - all good!

 

How do I add the redundancy payment?  Should I add a pay category with a fixed rate that is exempt from PAYE and NIC? 

 

Thanks :smileyhappy:

Best answer by Ashleigh1

Hello ALKS, 

 

Welcome to the Community page, 

 

Yes you will need to add a new pay category for redundancy pay with a fixed rate and exempt from PAYE and NIC.

Once it is been added you will then be able to run the payroll. However, unless they get more than 30k when it becomes taxable then you would need to have a second category for the difference. 

2 replies

A
Ashleigh1Answer
July 29, 2020

Hello ALKS, 

 

Welcome to the Community page, 

 

Yes you will need to add a new pay category for redundancy pay with a fixed rate and exempt from PAYE and NIC.

Once it is been added you will then be able to run the payroll. However, unless they get more than 30k when it becomes taxable then you would need to have a second category for the difference. 

A
ALKSAuthor
July 29, 2020

Thank you!!!!

B
Becky29
July 29, 2020

😊

C
Cordelia
April 12, 2022

Hi,

I've created a Redundancy payment type with a fixed amount under payroll, but when it's applied to the relevant employee it's showing Tax and NI charges.  How do I exempt this payment from PAYE in QBO please? Thanks in advance.

AlcaeusF
AlcaeusF
April 12, 2022

Hello @Cordelia,

 

Thank you for posting here in the Community. I can help you with your concern about the redundancy payment in QuickBooks Online.

 

I suggest you create another pay category for the redundancy payment. There should be boxes you can untick for taxes you don't want to calculate in the pay run.

 

Here's how:

 

  1. Click the Gear icon in the upper-right corner.
  2. Select Payroll settings.
  3. Go to the Pay Categories tab under Pay Run Settings.
  4. Press Add in the upper-right corner.
  5. Enter the name and select Save. 
  6. Put a checkmark on the box beside PAYE exempt. 
  7. Make the necessary changes.
  8. Hit Save.

 

Once done, you can proceed with entering the payment. You can include the category through the earnings section of the pay run.

 

Additionally, you can visit this article to learn more about how to terminate an employee or cancel a termination in QuickBooks: Terminating an employee.

 

Keep us posted if you need anything else regarding your payroll or processing redundancy payment. Have a great day.

T
thomasmeany
October 28, 2022

This instruction is not working for me. I can not find the payroll settings option with such a detailed view. Can you please provide more info specific to quickbooks online advanced?

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