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When an employment ends

  1. Overview
  2. When an employee leaves your employment
  3. Calculating tax when your employee leaves
  4. Payments made after your employee leaves
  5. When an employee retires
  6. Claiming the increased basic lump sum exemption
  7. When an employee transfers to another branch
  8. Arrears payments to a deceased employee

Payments made after your employee leaves

Note

The information on this page refers to your current obligations. For your obligations before 1 January 2019, please see the Employers Guide to PAYE.

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 2018 but paid in 2019

Where an employee leaves in 2018 but you are making a payment in 2019, you must report the payment by payroll submission in 2019. 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 will only apply to post-cessation payments for employments which ceased in 2018.

Next: When an employee retires

Published: 06 April 2020 Print this page

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