---
title: Payroll Exit for the Non-Returning Employee
description: An employee could give notice that they will not be returning to work after their parental leave period. Here is how to set their Final Pay in our system.
---

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# Payroll Exit for the Non-Returning Employee

## An employee could give notice that they will not be returning to work after their parental leave period. Here is how to set their Final Pay in our system.

*Updated: November 2024*

**In this article**:

- [Leave Balances](https://help.thankyoupayroll.co.nz/en/payroll-exit-after-parental-leave#PLNotice_Leave)
- [KIT Hours and Return-To-Work Periods](https://help.thankyoupayroll.co.nz/en/payroll-exit-after-parental-leave#PLNotice_KITHours)
- [Resources and Further Information](https://help.thankyoupayroll.co.nz/en/payroll-exit-after-parental-leave#PLNotice_Resources)

**Follow these links to find out more about**:

- [Setting up Payroll for Parental Leave](https://help.thankyoupayroll.co.nz/en/managing-parental-leave?hsLang=en)
- [Managing Payroll while the Employee Is On Parental Leave](https://help.thankyoupayroll.co.nz/en/managing-payroll-during-parental-leave?hsLang=en)
- [Managing Payroll for the Employee Returning from Parental Leave](https://help.thankyoupayroll.co.nz/en/payroll-for-employee-returning-from-parental-leave?hsLang=en)

---

| ![Info - Blue Block (1)](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/CalloutIcons/Info%20-%20Blue%20Block%20(1).png?width=52&height=52&name=Info%20-%20Blue%20Block%20(1).png)   | Notice: Your employee should inform you of their intention of not returning to work: - in writing - at least 21 days before their return date, or following their notice period in the employment agreement |
| --- | --- |

When the employee does not return to work at the end of their parental leave period, you need to set a Final Pay for them. Although this is a [usual Final Pay](https://help.thankyoupayroll.co.nz/en/creating-a-final-pay-for-a-departing-employee?hsLang=en), the extended period of unpaid parental leave has some unique situations that could create uncertainty. No worries, we're here to make things as clear as possible.

| ![Info - Blue Block (1)](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/CalloutIcons/Info%20-%20Blue%20Block%20(1).png?width=52&height=52&name=Info%20-%20Blue%20Block%20(1).png)   | Termination Date: If your employee does not return to work after parental leave, the first day of parental leave becomes their termination date. |
| --- | --- |

\*Any KIT Hours or sporadic returns to work after this date fall outside this Final Pay calculations as it is after the termination date.

### Leave Balances

Include the employee's annual leave balance and leave accrual up to the termination date in the employee's final pay.

- Any annual leave entitlement allocated or accrued after that date is lost
- Base any alternative leave owing on the rate of the last day of employment, which is their parental leave start date.
- If the employee has a positive **allocated leave** balance and a public holiday falls within that extended time, include payment for that [public holiday in the final pay as with any other final pay scenario](https://help.thankyoupayroll.co.nz/en/creating-a-final-pay-for-a-departing-employee?hsLang=en#FP_PublicHolidays).

| For example: The employee (work pattern: Mon-Fri) went on parental leave on Friday 21 April, with a **positive allocated leave balance of 3 days**. They do not return after parental leave, so this date becomes their termination date. The 3 days of positive allocated leave extends forward to the 26th April. ANZAC day falls on the 25th, so payment for ANZAC day must be included in the final pay. |
| --- |

---

### What about KIT Hours or Sporadic Return-To-Work Periods?

Any KIT hours or periods of return-to-work pay do not form part of the 8% of gross earnings calculation on termination as this falls **after** the termination date.

---

### Resources and Further Information

- [Final Pay Information - Employment NZ's website](https://www.employment.govt.nz/pay-and-hours/pay-and-wages/final-pay)
- [Setting a Final Pay in Thankyou Payroll](https://help.thankyoupayroll.co.nz/en/final-pay?hsLang=en)

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