When to offboard an employee in Onfolk
An employee leaving your company represents the final step of their employment lifecycle. Whether the decision stems from them or you, we've automated most of the employee offboarding process in Onfolk so it's seamless for both of you.
Always offboard an employee before payroll is confirmed for the month. For this reason, we recommend marking the employee as a leaver as soon as possible, so you don't forget about it! If you're offboarding an employee after payroll has been confirmed, get in touch with us at [email protected].
How to offboard an employee in Onfolk
Offboarding an employee in Onfolk will take you a couple of minutes - see below each step.
Update the leaver's personal address
Before offboarding the employee, make sure their 'payslip' email address in their Onfolk address corresponds to their forwarding address (or personal email address). This is where their P45 and final payslip will be sent once they're offboarded.
If the payslip email address isn't updated before payroll is run, they will not receive their final payslip and P45.
Mark them as a leaver
Go into the leaver's profile in Onfolk, and then into the "Actions" section.
Click on "Mark as a leaver".
You'll arrive on the following page, which asks you for 3 pieces of information:
1: Their leaving date: this corresponds to when their last contractual day with the company (or when the final day of they employment contract is). This date should include their notice or gardening leave if relevant.
2: Regrettability: whether you'd wanted the employee to stay or not.
3: Notes: these notes are private, so you can add the reason for their termination or anything else that might be relevant to know.
4: Final salary: the figure mentioned will be their final gross salary (before tax). You can use this figure to let the leaver know how much gross pay they'll get in their final payslip.
5: Accrued holiday
Is this pensionable? Click this if you'd like the gross amount to be added to pension contribution calculations
Auto-add as a bonus (recommended): Click this to automatically add this amount to the leaver's final pay.
Once you've filled out all sections, click on "Mark as a leaver" to action the process in Onfolk. The employee won't be notified or immediately offboarded, so you can do it ahead of time.
Add any final pay elements to payroll
Once you've marked the employee as a leaver, Onfolk will automatically calculate:
Their pro-rata'd holiday pay based on their final working day
Their pro-rata'd pay for their final payroll.
These elements will automatically be added to the employee's final pay in Onfolk's payroll tab. If you'd however like to add an additional severance payment or Pay In Lieu Of Notice (PILON), this will need to be added manually.
💸 Adding a severance payment (or termination award)
A severance payment (or termination award) is a lump sum agreed to be paid to the leaver in their final pay, on top of their regular monthly income.
For severance payments, up to £30,000 can be paid tax-free. You can read more about the rules around severance payments on HMRC's website.
To add a severance payment to a leaver's final pay, you just need to add the amount agreed as a bonus - just tick the 'termination award' box so it is not taxed.
💸 Adding Pay In Lieu Of Notice (PILON)
PILON is the fact of:
terminating an employee's employment contract sooner than it would have if they worked their entire notice period, and
paying the employee the amount of notice period that hasn't been worked, as additional income in their final pay.
💡 PILON is taxed as regular income, unlike severance payments.
If you choose to substitute a worked notice with PILON, the employee's final working day will be brought forward, which means you'll need to manually add the additional income to their final pay.
How to work out PILON:
Calculate the number of days (or months) the employee would have worked, should they have worked their entire notice
Multiply this number by their daily rate (for days) or monthly salary (for months).
Add this amount to the leaver's final pay, as a bonus in payroll.
What happens once the employee has been offboarded in Onfolk
A few actions happen in the background once an employee has been offboarded:
Their P45 and final payslip will be sent on the pay day following their leaving date, as figures can change until then. If they're enrolled in a pension, they will be unenrolled on their leaving date.
The P45 and final payslip will be sent to their payslip email. If they are losing access to this address, update their payslip email address to a personal address to ensure they receive their documents.
If they manage anyone, we'll un-assign them as a manager from all their reports as soon as they're marked as a leaver.
Mark Albus as a leaver
We'll notify HMRC and your pension provider that the employee has now left his employment with your company.