How to Process Separation Pay in Sprout Payroll

Processing of Separation Pay in Sprout Payroll is as easy as 1,2,3. Although, for now, we do not have an automatic computation for separation pay, you may still use Sprout Payroll to include Separation Pay. Continue reading to know more.

In the Final Pay Run, the system automatically generates withholding tax for the current year to determine whether the employee is payable or not. Aside from the withholding tax, de minimis allowance and remaining balances can also be calculated. T know more, you may check this article: How to Compute Final Pay on Sprout Payroll

But! Before you continue to process the Final Pay Run, you may upload a one-time adjustment using this KB article: How to Set Up a One-Time Adjustment for a Specific Employee

Things to note:

• Adjustment Type should be "OTHER NON TAXABLE INCOME"
• Apply Before Tax is "No"
• Is Taxable is "No"

There you go! You can continue to process the final pay of your employees and the separation pay shall now reflect in their generated payroll register. 

Sharing the below-related KB articles for your reference:

• Different Payroll Types in Sprout Payroll
• DOLE Handbook (page 42-44)