Final pay on termination

Final pay is what a leaver is owed on the way out: their last regular pay, plus separation pay such as severance, unused leave and a pro-rated bonus, with income tax settled for the whole year. In KAMI the process runs itself once HR records how and when the person left. Payroll's job is to review, not to compute.

The one thing that stops it running is a separation type with no statutory reason. Map every type once, in Settings, and final pay never asks a question again.

Where: Employee profile › Termination tab; Payroll › Dashboard › Employees need final pay; the leaver's payslip You need: the Termination Pay right to compute or amend separation pay; payroll rights on the batch cycle to approve and pay

Which one, when

How the process runs

1. HR records the Separation type and Termination Date on the profile.
2. The type carries the statutory reason, so payroll's reason is filled in at the same moment.
3. Separation pay is computed either now, in Termination pay on the same tab (pick the batch, check the reason, set the bonus date, Calculate, Confirm payment), or automatically when the payroll batch covering the last day is created with the Termination toggle on.
4. The day after the termination date, KAMI deactivates the employee.
5. The final payslip carries the red Final Pay badge and reconciles tax for the full year. Payroll reviews the Final Pay card, amends if needed, then approves and pays the batch as usual.
6. Anyone neither route finished waits on the dashboard under Employees need final pay, and batch approvers get a Monday email for anyone past 30 days.

Before you start

Three settings decide whether the process runs on its own. Set them once.

Terminations (Payroll settings › Offboarding & Access › Terminations). The Termination Types table sets, for each reason for termination, the percentage of Severance, Service Reward, Leave Compensation, Retirement Benefit, Benefit Compensation and Prorated Bonus that reason pays. The cards below it set the wage basis and service bands for severance, service reward and retirement benefit, the wage basis for Payment in Lieu, and the bonus rules. See Termination settings.

Separation types (Team settings › Onboarding & Offboarding › Separation Types). Each type HR can pick, such as Resigned or End of contract, carries a Statutory reason. KAMI ships six types: Resigned and Retired map to Resignation and Retirement; End of contract, Terminated for cause and AWOL map to N/A, which pays no severance; Authorised cause is Chosen per employee, so HR picks the exact cause (redundancy, retrenchment, disease and so on) when recording the exit. A type showing Not mapped blocks automatic final pay for everyone classified with it. The page warns you at the top and offers Map now.

Batch cycle (Payroll settings › Batch Cycles › Setup › Other Payments). The Termination toggle must be on for the cycle that pays leavers. It is what pulls a deactivated leaver into the batch and flags their payslip as final pay. Leave it off on cycles that must never carry final pay, such as a 13th month or bonus batch.

⚠️ A type left on Not mapped is the most common reason a leaver sits in the queue for weeks. Check the Separation types page once after go-live, and again whenever someone adds a type.

Step 1: Record the separation

1. Open the employee's profile and go to the Termination tab.
2. Under Termination Details, choose the Separation type. The hint underneath shows the statutory reason it carries.
3. If the type is Authorised cause, or another type set to Chosen per employee, a Cause field appears. Pick the exact statutory cause.
4. Set the Termination Date: the employee's last day.
5. Click Apply. KAMI asks whether to keep the schedule cleared during the termination period. Answer Yes if the person is not working out notice.

Both fields are required together. You cannot save a termination date without a separation type.

Do this as soon as the resignation or decision is confirmed, even if the last day is weeks away. A future date is fine. The employee keeps working and is deactivated automatically the day after the date passes, in their branch's local time, checked hourly.

Step 2: Compute the separation pay

Two routes. Pick one; they end in the same place.

Now, on the same tab. Under Termination pay, right below the details you just applied:

1. Choose the Termination payroll batch: an open batch, normally the one covering the last day.
2. Check Reason for termination. It is filled in from the separation type. Change it only if this leaver's statutory cause differs from what the type carries.
3. Set Last Bonus Date: the day the pro-rated bonus counts from, normally the day after the last bonus was paid.
4. Click Calculate. The table shows each component with its wage basis, length, multiplier and amount, and the total.
5. Click Confirm payment, then Confirm in the dialog. The lines are written onto the leaver's payslip in that batch as Termination payments.

Or let the batch do it. Create the payroll batch for the period that contains the last day, as you would any other batch. For every leaver whose last day falls inside the period, KAMI pulls them in whether or not they have already been deactivated, flags the payslip Final Pay, computes separation pay from your Termination settings for their statutory reason, and writes it onto the payslip as locked other-payment lines.

Either way, the final payslip reconciles income tax for the whole year, so the leaver's tax is settled rather than carried.

If the leaver's type is Not mapped and nobody picked a reason, the payslip is still flagged Final Pay but shows Not computed. Map the type, or pick the reason on the payslip, and it computes at once.

A last day that falls in a later period does nothing special yet. The employee gets an ordinary payslip now and a final one in the batch for their last period.

Step 3: Review the calculation on the payslip

Open the leaver's payslip. Under the status panel sits the Final Pay card: the separation pay total, one line per component, the reason, the separation date, and two buttons.

View calculation opens the Final pay calculation window. The strip at the top shows the reason and where it came from, the separation date with hire date and service length, the bonus start date, and the termination tax. The table shows each component with its wage basis, basis amount, length, multiplier and amount, and the Total separation pay.

To change it, click Amend:

• Tick or untick a component to include or leave it out.
• Type an amount to override the calculated one. Changed values are highlighted.
• For Payment in Lieu, type the number of days. The amount follows.
• Change Bonus counted from to move the day the pro-rated bonus counts from. Only the bonus row recomputes. KAMI remembers the date you chose.
• Reset to defaults throws away every edit and computes everything again from your Termination settings.
• Save to payslip writes the result onto the payslip and refreshes it.

Amend needs the Termination Pay right and a payslip that is still Open or Pending. Once the payslip is paid, the window is read-only.

The second button is BIR 2316 for Philippine companies and Year-to-date summary elsewhere. It opens the fiscal year summary for the year of separation, where the year-to-date figures and, in the Philippines, the 2316 form live. See Year-end payroll reports.

The same card appears in the payslip details dialog on the batch page, so you can review every leaver without leaving the batch.

Step 4: Catch up anyone the batch missed

The Payroll dashboard tile Employees need final pay counts leavers whose last day has passed and whose final pay is not done. Reasons a leaver lands here:

• the last day was recorded after the batch for that period had already been created;
• the batch was created with the Termination toggle off;
• the separation type was Not mapped at the time.

Click Compute final pay on the tile to open the queue. Each row shows the separation date, how many days ago it was, a Status pill and the Reason for termination, pre-filled from the separation type. Rows marked Needs a reason have a dropdown.

1. Pick the Payroll batch to put the final payslips in. It must be open.
2. Tick the leavers.
3. Click Preview final pay. The preview lists severance, leave compensation, other components and the total per leaver, computed from your settings. Nothing is written yet.
4. Click Compute and add to batch.

Stage only puts a payslip in the batch without computing: as a final pay payslip to compute later on the profile, or as a regular payslip with no final pay. Remove Selected Profiles takes a leaver out of the queue for good, which marks them Waived. Use it for someone whose final pay was handled outside KAMI.

Step 5: Approve and pay

On the batch overview, the attention item Termination payslips lists how many final payslips the batch holds, with the note that they carry tax reconciliation and need review before approval. Open each, check the Final Pay card, then verify, approve and pay the batch as usual. See Running a payroll batch cycle.

Final pay is not held back. There is no separate approval step for it. The batch checklist is the review.

What happens next

• Tax. The final payslip reconciles income tax for the whole year, so the termination tax line can be a refund or a top-up. See Payslip tax details explained.
• Status. Paying the payslip marks the leaver Paid and locks the calculation. Reopening the batch unlocks it.
• Year-end. The final payslip and its separation pay flow into the fiscal year summary, the 2316 and the year-end reports like any other payslip.
• Reminders. Every Monday, the approvers of each batch cycle get an email listing leavers past the 30-day window with no final pay, titled "Final pay: N leavers past the 30-day window". No email means nobody is overdue.
• Loans. Only the loan instalment that falls in the period is deducted. If a loan must be settled in full from final pay, add the balance as a deduction on the payslip.

Components of separation pay

In the Philippines, the four reasons that carry no separation pay by law (Replacement, Transferred, Death and N/A) pay no severance, and severance for an authorised cause on a monthly basis is never less than one month's pay.

Tips

• Record the exit the day it is confirmed. Everything downstream keys off the termination date. A date entered after the batch exists means computing it on the Termination tab or a trip to the dashboard queue.
• Map every separation type before the first leaver. Resigned, Retired and the three N/A types come mapped. Any type you add starts as Not mapped.
• Use Authorised cause for anything that pays separation pay by law. Redundancy, retrenchment, closure and disease each have their own statutory cause and their own rate. Picking it on the employee, not on the type, keeps the record honest.
• Keep the Termination toggle on your regular cycles and off your special ones. A bonus batch with the toggle on would flag leavers' bonus payslips as final pay and reconcile their tax there.
• Check the Bonus counted from date on anyone paid a bonus mid-year. It defaults to 1 January of the current year. If the last bonus covered up to another date, change it before saving.
• Amend on the payslip, not in settings. Changing Termination settings to fix one leaver changes the next hundred. Override the amount in the window instead; it is highlighted so the reviewer sees it.
• Glance at the dashboard tile every cycle. A number other than zero means someone is waiting. The Monday email is the backstop, not the process.

Frequently asked questions

The payslip says "Separation pay not computed yet". Why? The leaver's separation type carried no statutory reason when the batch was created. Pick the reason in the card's dropdown and click Compute final pay, or map the type under Separation Types so it never happens again. Once a reason is known, KAMI computes on its own.

Someone left last month and their final pay was never done. Where do I start? Payroll › Dashboard › Employees need final pay. Pick an open batch, tick the leaver, preview, compute. The batch does not have to cover their last day.

Can I change the separation pay after it was computed? Yes, while the payslip is Open or Pending: View calculation › Amend. Tick components off, override amounts, change the notice days or the bonus start date, then Save to payslip. You need the Termination Pay right.

Why is the tax on the final payslip so different from a normal month? Because it is the whole year's tax settled at once. The termination tax line is the difference between what was withheld during the year and what is actually due. It can be negative.

The leaver's final payslip is in the batch but there is no severance line. Either the reason pays no severance (Resignation, N/A and the four Philippine no-pay reasons), or the Termination Types table has 0% for that reason. Open the window: the Severance row shows the percentage used.

Does the employee's access end when I set the termination date? No. Access ends the day after the termination date, automatically. To cut access now, use Deactivate under KAMI Workforce Access on the same tab. See Deactivating, terminating and rehiring employees.

Where is the 2316? On the Final Pay card, BIR 2316 opens the fiscal year summary for the year of separation. The form is issued from there.

Related articles

• Termination settings
• Deactivating, terminating and rehiring employees
• Batch cycles
• Running a payroll batch cycle
• The payroll dashboard
• Payslip tax details explained
• Leave conversion and encashment
• Year-end payroll reports
• Turnover report