When an employment ends

Payments made after your employee leaves

You may make a payment to an employee after they have ceased employment. The process for reporting these payments will depend on whether the payment is made:

  • in year
  • or
  • out of year.

Payments made in the year your employee leaves

The process for reporting a post cessation payment where the employee ceases employment in the current tax year is as follows:

  • You should look up the available Revenue Payroll Notification (RPN) for the employee.
  • You should make a payroll submission for the post cessation payment.
  • Include the original employment ID and the original cessation date.
  • Include the payment date (this is the date the post cessation payment is made).

Payments made outside the year your employee leaves

The process for reporting a post cessation payment where the employee ceases employment in a previous year is as follows:

  • You should submit a new RPN request.
  • Do not supply an employment commencement date.
  • Make a payroll submission for the post cessation payment.
  • Include the original employment ID and original cessation date.
  • Include the payment date (this is the date the post cessation payment is made).

Income earned in the previous year but paid in the current year

Where an employee leaves in the previous year but you are making a payment in the current year, you must report the payment by payroll submission in the current year. Do not include the original cessation date.

You must report this post-cessation payment with a start and end date of whatever date the payment is made. This only applies to post cessation payments for employments which ceased in the previous year.

Next: When an employee retires