How to Terminate an Employee

Terminating an employee in Pento

To terminate an employee in Pento, follow the below steps:

1. Go to the Employees in the left-hand sidebar
2. Click on the employee you wish to terminate
3. You will see an action button to the right of the employee name and tabs. Select this, and you will see the following options:
   
4. Select Terminate Employment from the list, and you'll see the following window:
   
5. You should then enter the following basic information:
   • Termination date
     The date you wish to terminate this employee's employment.
   • Post-termination email
     Enter an alternative email address so Pento can send a final payslip, P45 and P60 documents – for example, a personal email address.
   • Holiday entitlement
     You can choose if you want Pento to calculate the holiday for you or if you want to enter the balance manually. If you choose to Enter balance manually, you'll see this option:
     
6. If you choose Calculate for me, you should then enter any specific holiday entitlement information.
   • Work days per week
     You can leave this blank unless the employee works part-time.
   • Entitled Yearly Holidays
     Enter the employee's annual holiday entitlement.
   • Hereby Used
     Enter the number of days the employee has taken in the year.

Holiday calculation

Pento calculates the outstanding holiday based on the Holiday Calendar Year defined in your Company Settings. You have the option to choose your Holiday rounding method to round up to the nearest half-day or two decimal places. 

Pento will automatically calculate if the employee is entitled to any outstanding holiday pay based on your provided information. This will be shown in the Outstanding holidays field, and the amount due will be displayed on the Entitled Holiday Pay row.

Entitled Holiday Pay is calculated as follows: Annual Salary ➗ 260 ✖️ outstanding holidays. 

In this example: £70,000.00➗ 260 ✖️ 3.67 🟰 £988.08

Pro-rata adjusted salary

Pento automatically pro-rates the employee's salary to the leave date; the calculation is based on the Day rate method defined in your Payroll Settings (Payrolls → Pay Schedules)

In this example, the pro-rated salary is calculated as follows:

Monthly Salary ➗ working days in May ✖️ days worked

E.g. £5,833.33 ➗ 23 ✖️ 5 🟰 £1,268.12

Once you have confirmed the termination, the employee's payslip preview will look like this: 

Tip – Hovering on the '?' will allow you to see the dates for which Pento has pro-rated the salary.

Here's a Loom Video demonstrating how to terminate an employee. 

Points to Note

Alternative working patterns

Pento does not currently consider alternative working patterns when pro-rating salary - you will need to adjust the basic pay using the Gross Addition/Deduction pay item in the payroll draft.

Alternative methods for calculating Outstanding Holiday Pay

If you want to use an alternative method to calculate Outstanding Holiday Pay, you can leave the 'Entitled Yearly Holiday' & 'Hereby Used' blank - You will need to add a Gross Addition/Deduction pay item in the payroll draft.

Accidental employee termination

If you accidentally terminate an employee, you will need to contact support, who can remove the termination.

The termination date is in a previous month.

Please refer to our help article Backdated Terminations

Downloading Employee P45

You can download a copy of the P45 from the Employee's profile if you need a copy for your records. You will see an action button to the right of the employee name and tabs. Select this and then select the Download P45 option.