Leave and terminations should always be processed as part of a Payrun wherever possible — this ensures balances, liabilities, and reporting remain accurate and fully auditable.
When leave is paid correctly through the pay process, it automatically updates an employee’s leave balance and appears as a transaction under the leave history.
⚠️ Leave balances only update after the pay process is completed. Payslips for the current pay show balances prior to any leave applied in the pay it relates to
Processing Leave
Leave transactions can either be entered manually via the Payrun screen or by import, please review the FlexiCSV guide for importing leave transactions, this guide only covers manually entering leave and processing termination pays.
Once you’ve selected the employees to pay using the Who to pay button in the Payrun screen, you can enter a leave transaction much like you do with any other pay input.
Entering a leave transaction
This is done as follows:
Select the employee from the employee column
Select the Leave taken tab
Click the + button at the bottom of the transactions column
The Leave and Termination wizard will then appear.
⚠️ The Leave and Termination wizard layout and options vary depending on the jurisdiction your payroll is configured for. If the following instructions don't match what you see in your payroll, please refer to the leave section of your country specific guide
💡Tip: Always review the balances shown at the bottom of the window before entering leave. Smoothpay will not prevent you from paying out leave in advance.
The displayed options are:
Consume - Enter the number of hours
Hours of - Select the leave type to use
____ to ____ _______ - Enter a date that the leave is relative to, or a from and to-date (optional) and payslip note (optional)
Click OK once the modal has been completed.
A transaction should then appear in the transactions column, which you will be able to see under the Leave taken tab
If an error has been made, it’s best to delete the transaction using the – button at the bottom of the transaction column, then start again.
This is because Leave and Termination wizard uses the employee’s contract settings to proportion the leave correctly, while manual adjustments to the transaction directly risk calculation errors because all fields remain fully editable and are not anchored to the contract settings.
Processing Terminations
While the rules and the outputs for termination pays are different across the jurisdictions that we provide payroll for, the method to terminate an employee is the same.
A termination pay follows the same path as a normal pay process, and should be processed as part of your normal pay cycle.
There is no need to separate termination pays from normal pay processes unless it is unavoidable.
Prior to processing the termination
Before you begin the termination process:
Enter all normal pay inputs - Any work, or allowance codes before processing. Some jurisdictions use these values as part of the termination calculations.
Include only leave types not paid out upon termination - Any leave types that are paid out as part of termination will be removed automatically, as their total liability is paid during the termination process.
If you need to process additional leave types that are paid out on termination, complete the termination separately, after you’ve processed the pay that includes those leave types.
Review your country-specific guide before proceeding - Your relative guide will include details of how a termination pay is calculated for your jurisdiction.
Standard termination process
To process the termination:
Select the employee you wish to terminate
Click the Terminate button
For most countries, a message box will appear. The exact text varies by jurisdiction, but it will indicate whether transactions were generated under Allowances or Leave taken.
Click OK to continue:
The end result should be automatic calculation of your termination liability for the employee, although some cases may still require manual input.
There are generally one or two transactions created from the termination process:
The outputs vary in name and type for different countries, depending on what the statutory requirements of your country are.
Manual Termination
Processing terminations as part of a pay process is the recommended approach to terminating employees, as it should pay out whatever legal entitlements remain outstanding.
However, there are reasons that mean a termination cannot be handled in the normal way, such as:
Casual employees not returning to work - It’s not always obvious if a casual employee will return to work. There may be nothing left to actually pay them, so you can’t include them in a pay process and terminate them, as you may not have known it was going to be the last time they worked for you.
Termination pays that result in a negative NET pay - If an employee’s leave entitlements have been overused, their termination pay may be negative, meaning they effectively owe their employer money. If the employee’s final pay, including standard pay entries produces a negative NET pay, this cannot be processed.
To get around these situations, you can mark an employee as terminated without processing a pay.
To use this method of termination:
Go to the Staff screen
Select the employee who is being terminated
Select the Contract tab
Select the nested Employment tab
Click the edit button
Mark the Terminated checkbox - a message may appear warning you that the employee still has leave entitlements
Enter a termination date
(optional) select a reason for termination
Click Save.
