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From time to time employees are due payments after they have left the business. If an employee has already been terminated, their P45 produced, and been reported to HMRC as a leaver, then we are unable to amend their record and a Payment After Leaving (PAL) will need to be processed.
- Use tax code 0T on a week 1 or month 1 basis (use the code S0T if they’re taxed at the Scottish rate or C0T if they’re taxed at the Welsh rate).
- Deduct National Insurance (unless it’s a redundancy payment) and any student loan repayments as normal - but if it’s an irregular payment like accrued holiday pay or an unexpected bonus, treat it as a weekly payment.
- Report the payment and deductions in your next FPS, using the employee’s original Date of leaving and payroll ID, and set the Payment after leaving indicator.
- Give the employee written confirmation of the payment showing the gross amount and deductions (a payslip).
- Add the additional payment in the Year to date field on the FPS if the payment is in the same tax year.
Note – Please note, a new P45 will not be provided.
We are currently working on implementing an automated PAL process, however until the feature is live in the next few months, you will need to contact support to create a PAL payslip for you.