When an employment ends

Calculating tax when your employee leaves

You should calculate your employee's tax and Universal Social Charge (USC) at the date of leaving or death. Instructions can be found in methods of calculating tax. You 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 and USC cut-off points. This is 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.

You 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 your employee leaves’.

Next: Payments made after your employee leaves