When an employment ends
Calculating tax when an employee leaves
The employer should calculate an employee's tax and Universal Social Charge (USC) at the date of leaving or death. Instructions can be found in methods of calculating tax. The employer must do this even if the final payment relates to a shorter than normal pay period.
For example, a monthly-paid employee should be given their full month's tax credits, tax cut-off points and USC cut-off points. This is the correct methodology even if the payment is for only part of a month.
This also applies if the employee is on emergency tax at the date of leaving.
The employer should refund any overpayment of tax in the usual way.
Any balance of pay an employee is to be paid after leaving should be included in the final payroll submission. If this balance has not been calculated at the leaving date please refer to ‘Payments made after an employee leaves’.
Next: Payments made after an employee leaves