Death in Service
What to do when an employee dies
https://www.gov.uk/what-to-do-when-an-employee-dies
Payrun
Use the normal payrun frequency.
Nic is not payable on any payments made after an employee dies, so you need to change the NIC Letter to 'X', this can be done in 'EmployeeDetails/Tax_N' or in the 'ProcessPayroll/Emp'. This will ensure that no NIC will be charged to the employee or employer.
You will need to account for any outstanding holiday pay etc.
Tax will be taken off as normal.
Prepare P45
After you have updated the payrun do the 'P45 Leaver' in the 'EmployeeDetails.
RTI/FPS
Send this in as normal.
Making a payment after the final payrun.
If you need to make a further payment to the employee after you have sent in the Leaver/FPS then tick 'Make payment after leaving' in the 'EmployeeDetails'. This will change the tax code to 0T on a week1 basis. The employee will then become available in the payrun. You might want to consider changing the Pay Frequency to Weekly. Send in the RTI/FPS as normal.
Dealing with the payment and P45.
"If an employee or someone to whom you pay an occupational pension dies you must complete a form P45 and make any final payment due to the deceased's personal representative. This is usually the executor of their will."
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