Xero guide: Employee termination

How it works

Employment Hero is the source of truth for your company settings, payroll settings, and employee file data. For you to terminate an employee correctly with a Xero connected system, you will need to follow a specific process. This process will make sure your employees receive their correct termination pay, and their off-boarding from Employment Hero is smooth and trouble-free.


HR Plan:   Free   Standard   Premium   Platinum
  User Access:   Employee         Manager         Admin      

  We base the default access level on a per user basis and whether they have  view,  edit and  delete access and excluding any changes made via our Custom Security feature.

What you need to do

There are three steps that an administrator needs to complete when terminating an employee and processing their last payment. An administrator needs to complete these actions on both the Employment Hero and Xero platforms. The three steps are: 

Step 1: Process termination pay

First, run a pay run as usual and within that pay run you can mark the relevant employees that need to receive a termination payment due to them leaving your organisation. The steps on how to undertake this are:

  1. Log in to your Xero platform.
  2. Click on the Payroll button.
  3. Click the Pay Employees button.
  4. Click the Process Pay Run button.
  5. Click on the employee name who needs a final payment added.
  6. Click the Set as Final Pay button.
  7. Click the Ok button.
  8. Click the Save and Close button.
  9. Click the Post button.
  10. Click the Post button.
Step 2: Import the pay run

The next step is to import the pay run into Employment Hero. This import process happens automatically at set times, when the two platforms meet the right conditions. If you are processing the employee termination in one go though, it is best to import the pay run completed in step 1 manually. The steps on how to undertake this are:

  1. Log into your Employment Hero platform.
  2. Click the   General Settings menu.
  3. Click the Add-ons submenu. 
  4. Click the Actions   button. 
  5. Click the   Update button. 
  6. Click the   Update from Payroll button. 
  7. Select the required pay slip and click the Import button.

    Helpful Hint

    The Payslips section will now show a green Updated button and means Employment Hero has successfully imported your selected Xero data.

Step 3: Off-board and terminate an employee


Before off-boarding an employee, make sure that you have created an off-boarding checklist, so that the platform generates a list of tasks that need completing before their termination date. To read further details on how to create an off-boarding checklist, refer to the following article.

The last step is to off-board the employee within Employment Hero. When off-boarding an employee, you can select the date of their termination, the reason for them leaving, and add in any needed comments. The steps on how to undertake this are:

  1. Log into your Employment Hero platform.
  2. Click the  Personnel menu.
  3. Click the  Employees submenu.
  4. Click the Action   button next to the employee that needs off-boarding.
  5. Click the Off-Board Employee button.
  6. Complete the following fields:
    • Resignation.
    • Abandonment.
    • Termination.
    • Retirement.
    • Other.
  7. Click the Terminate button.

Author recommended

So you have now processed a termination and you are now wondering, what next can I do. There are two recommendations I would make on this front and they are:

  • Xero guide: Leave balance visibility This guide walks you through how to customise your employee's leave balance visibility in your Employment Hero platform.
  • Common Xerp Import Conflicts This section contains a range of error resolution articles that cover common import conflicts our clients run into when syncing their Xero data.
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