PAYROLL: Exit Settlement v2: Advanced Exit Payroll Controls

Overview

We’ve introduced Exit Settlement v2, enabling payroll administrators to calculate and process final settlements (Full & Final / F&F) for US employees directly through payroll.

This update adds a dedicated finance section within the employee exit flow tailored specifically for US payroll requirements. Payroll admins can now review, adjust, and finalize all pending pay items for exiting employees and process their final settlement through the appropriate payroll cycle.

This ensures organizations can handle employee exits in a compliant, structured, and automated manner, reducing manual work and minimizing payroll errors.

Key Enhancements

1. US-Specific Exit Settlement Flow

A new Finance step has been introduced in the exit workflow for US employees.

After an exit is approved, payroll admins can navigate to:

Manage → Finances → Review and Finalise

This allows admins to calculate the final settlement directly within the platform, including all pending pay items and adjustments.

2. Structured Exit Settlement Process

The settlement process now follows a two-step workflow:

Step 1: Pay Items Review
Admins can review and update all relevant pay components for the exiting employee, including:

• Regular pay (prorated if the last working day falls within the pay cycle)
• Additional earnings such as bonuses, tips, severance, or custom earnings
• Contractor reimbursements
• Pending expenses
• Asset damage charges

Payroll admins can modify hours or amounts where required, and the system recalculates totals dynamically.

3. Automatic Proration of Final Salary

If the employee’s last working day (LWD) falls within an active payroll cycle, regular earnings will be automatically prorated.

Proration logic varies based on compensation type:

• Hourly employees: Based on actual hours received from workforce data.
• Piece-based employees: Admins manually enter pieces or hours.
• Salaried employees: Converted to hourly rate and calculated based on payable hours within the cycle.
• Contractors with per-pay-period pay: No proration applied.

This ensures final wage calculations reflect actual worked time in the final pay cycle.

4. Additional Earnings & Adjustments

Admins can add or modify additional earning components during settlement.

Supported items include:

• Bonuses
• Tips
• Severance
• One-time earnings
• Custom earning components

If an earning component has a future pay date, admins can decide whether to:

• Pay it early, or
• Void the payment

Amounts can also be adjusted without affecting the employee’s compensation configuration.

5. Compliance with Final Pay Requirements

The feature helps employers meet state-level final paycheck requirements by enabling timely processing of final wages through payroll.

By integrating final settlement within payroll:

• Employers can ensure accurate wage calculations
• Payroll taxes and filings remain fully compliant
• Termination information is correctly communicated to payroll authorities.

6. Exit Settlement Status Tracking

Exit settlements now move through clear statuses:

Finalisation Pending
Settlement details have not yet been finalised.

Settlement Pending
Settlement has been finalised but not yet processed in payroll.

Settled
Final settlement has been processed successfully in payroll.

This provides clear visibility into the settlement progress.

7. Payroll Integration

Once settlement details are finalised:

• The final settlement is processed within the selected regular payroll cycle.
• After payroll is processed, the employee’s termination date and inactive status are automatically updated in payroll records.
• Admins can view or download the final settlement paystub directly from the exit section.

8. Error & Warning Handling

Before reviewing the settlement, the system validates payroll data and highlights errors or warnings that may prevent payroll processing.

Examples include:

• Missing employee details
• Payroll configuration issues
• Workforce or compensation mismatches

Admins must resolve blocking errors before proceeding with the settlement review.

Additional Exit Handling Improvements

Exit Cancellation

Employee Rehire

Impact

With Exit Settlement v2, payroll administrators can now:

• Process US employee final settlements directly through payroll
• Reduce manual calculations and off-system payments
• Maintain compliance with final wage requirements
• Avoid payroll discrepancies caused by exited employees appearing in future cycles

This update significantly improves the accuracy, compliance, and efficiency of employee exit payroll processing.

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