How to Create and Disburse Payroll Reports Exclusively for Severance Pay and Severance Tax

When handling employee terminations, it’s essential to calculate and disburse severance pay and its corresponding tax with accuracy and clarity. This guide shows you how to create a dedicated payroll report exclusively for Severance Pay and Severance Tax using a streamlined process. By enabling the Severance toggle during payroll report creation, you can merge finalized tax group data, review severance values, and ensure correct integration into payroll calculations and payslips.

Follow the steps to set up, calculate, and disburse a severance-only payroll report seamlessly through the Staffinc platform.

Once the payroll report is finalized, Severance Pay and Severance Tax values are locked and correctly reflected in the Take Home Pay, payroll exports, and employee payslips. The system ensures full transparency by categorizing severance as an allowance and severance tax as a deduction, complete with tax rate notes. Whether disbursed via Staffinc or self-managed, this process provides a clear and compliant way to manage end-of-employment compensation.