Guide: Termination and final pay

When it’s time to say goodbye to an employee, there are a few important steps you’ll need to take in Wagepoint. This guide outlines your three main tasks:

Change the Employee’s status – Indicate that the individual’s next pay is their final pay, and gathers data for a smooth ROE process.
Run the individual’s Final Pay – Make sure the employee gets everything they’re owed, like their last paycheque and any remaining vacation pay.
Create and submit the ROE (Record of Employment) – Generate and submit the document the individual will need for Employment Insurance (EI).

This article will walk you through the process and offer you some tips based on our years of experience helping small business owners navigate the ins and outs of ROEs!

Before you start: ROE 101

To kick things off, let's get on the same page about ROE basics:

A Record of Employment (ROE) is an document issued by employers to Service Canada that provides details about an employee's work history. It is primarily used to determine eligibility for Employment Insurance (EI) benefits.
To submit your ROEs to Service Canada directly through Wagepoint, you’ll need to sign the ROE SAT addendum.

Follow the video below (or check out this article if you prefer written steps and screenshots!) to sign the ROE SAT and wait for approval before you create any ROEs. If you create ROEs before your ROE SAT is approved, you will not be able to submit them electronically later.

It depends on the pay frequency and how soon your next regular payroll run would be.

Pay frequency	Service Canada Guidelines
Weekly, Bi-weekly, or Semi-monthly	You must pay the final pay within 5 calendar days after the end of the pay period in which the interruption of earnings occurs.
Monthly	You must pay the final pay within 5 calendar days after the end of the pay period in which the interruption of earnings occurs OR 15 calendar days after the first day of the interruption of earnings, whichever is sooner.

More information can be found on the Service Canada website here.

The ROE form will populate with the information you’ve entered in Wagepoint.

You may wish to review the individual’s people profile and ensure the information is complete and accurate. You will be able to edit this information directly in the ROE, but any changes will not be reflected elsewhere in Wagepoint.

If the individual is missing required information for the ROE, you will not be able to complete the ROE process before you navigate to their people profile and enter the required information.
Yes, ROEs are included in all Wagepoint subscriptions. However, if you are on the Solo plan and are required to issue payment prior to the next regular payroll, then you’ll need to upgrade to the Unlimited plan to run a second payroll during the same billing period. Don’t worry, you can change your plan back to Solo for the following month.
To off-board a contractor or another individual who does not require an ROE, you can follow all the same steps below but skip Part 3.

Part 1. Change individual’s status to terminated

1. In the navigation menu, go to People.

2. Locate the relevant person, click the drop-down arrow, and select Change status.

3. Select Terminate.

4. Enter the person’s Last working day. This is the last date that the employee “went to work” in the office, the field, or their work-from-home computer.

4B. If the last working day falls in the middle of a pay period, you will be asked to provide some additional information about this Mid-cycle change.

Under Mid-cycle change,

Enter the number of days they will work in the final pay period
Enter the number of hours the individual will work per day

Based on the data you’ve entered, the system will calculate Hours for last payroll.

4C. At this point, you will need to choose how you will pay outstanding amounts. The outstanding amounts may include both regular pay as well as vacation owed, severance, or other incomes.

If you select Yes, take me to extra payroll now, then you will proceed to run an extra payroll. Keep in mind that you’ll need the Unlimited plan to run more than one payroll in a billing period. You can always change back to the Solo plan after you have run the extra payroll.

If you select No, pay amounts through regular payroll, then the information needed for the final pay will be saved and available automatically in your next pay run.

5. Click Save or Save and next (if you selected to run an extra payroll).

FAQs: Change status to terminated

It depends on the pay frequency and how soon your next regular payroll run would be.

If the pay frequency is Weekly, Bi-weekly, or Semi-monthly: If you will be running a regular payroll within 5 days, you may choose to pay out all additional monies owed with your regular pay run. However, if there is more than 5 calendar days between the end of the pay period in which the interruption of earnings occurs and the date of your next regular pay run, you should run an extra payroll to ensure that employees are paid according to the Service Canada’s guidelines.

If the pay frequency is Monthly: You must pay the final pay within 5 calendar days after the end of the pay period in which the interruption of earnings occurs OR 15 calendar days after the first day of the interruption of earnings, whichever is sooner. If you will be running a regular pay run within that time, you may choose to pay out all additional monies owed with your regular pay run. If you will not be running a regular pay run within that time, you should run an extra payroll to ensure that employees are paid according to the Service Canada’s guidelines.
If you are required to issue payment prior to the next regular payroll and you are on the Solo plan, then you’ll need to upgrade to the Unlimited plan to run a second payroll during the same billing period. Don’t worry, you can change your plan back to Solo for the following month.

Part 2. Run the individual’s final payroll, including vacation and monies owed

Now that you’ve marked the individual as Termination pending, you’re ready to run their final payroll. You should run the final pay before creating the ROE for the individual, however, be sure to keep the expected timelines for ROE submissions in mind.

Option A: Run an extra payroll

If you selected Yes, take me to extra payroll now, then you’ll automatically enter the extra payroll workflow from the previous step.

If you navigated away for whatever reason, you can also access the extra payroll workflow as usual.

Option B: Pay final amounts through regular payroll

If you selected No, pay amounts through regular payroll, then the information needed for the final pay will be saved and available automatically in your next pay run.

FAQs: Final pay

It depends on the pay frequency and how soon your next regular payroll run would be.

If the pay frequency is Weekly, Bi-weekly, or Semi-monthly: If you will be running a regular payroll within 5 days, you may choose to pay out all additional monies owed with your regular pay run. However, if there is more than 5 calendar days between the end of the pay period in which the interruption of earnings occurs and the date of your next regular pay run, you should run an extra payroll to ensure that employees are paid according to the Service Canada’s guidelines.

If the pay frequency is Monthly: You must pay the final pay within 5 calendar days after the end of the pay period in which the interruption of earnings occurs OR 15 calendar days after the first day of the interruption of earnings, whichever is sooner. If you will be running a regular pay run within that time, you may choose to pay out all additional monies owed with your regular pay run. If you will not be running a regular pay run within that time, you should run an extra payroll to ensure that employees are paid according to the Service Canada’s guidelines.
If you are required to issue payment prior to the next regular payroll and you are on the Solo plan, then you’ll need to upgrade to the Unlimited plan to run a second payroll during the same billing period. Don’t worry, you can change your plan back to Solo for the following month.
If you have set the employee’s status to termination pending, then the vacation pay will populate in your payroll automatically. You may need to run an extra payroll or include it with the person’s regular final pay.
Yes, if the employee’s status is set to Termination pending when the vacation is paid out.

If the employee is not marked as Termination pending, then the vacation calculation will not take into account the final pay and you will need to manually calculate it and add it to the vacation pay balance that you are paying out.

Part 3. Create an ROE and submit to Service Canada

The Create and Submit ROE workflow has four steps:

Step 1: Employee information
Step 2: Insurable hours & earnings
Step 3: Additional Payments
Step 4: Review & submit

In this video, we'll walk through each step of the workflow:

Prefer written instructions and screenshots? We've got you! Check out this step-by-step guide to Creating an ROE.

Avoid these common ROE mistakes

ROEs make you nervous? We get it. Here's something to help ⬇️

We’ve noticed that the most common ROE errors occur because of misunderstandings about just a few blocks. Below, you'll find a list of these trouble-makers and our tips for tackling them.

Block	What this box records	Tips and Notes
Block 11: Last day for which paid	This is the last day that the individual “went to work” in the office, the field, or their work-from-home computer.	Be sure that Block 11 reflects the last day the individual was paid for regular earnings (not any other funds owed, like vacation).
Block 12: Final pay period ending date	This is the ending date of the pay period that includes the individual’s last day of work.	Wondering about the difference between Block 11 and Block 12? Block 11 is the actual last day an employee was paid for working, and Block 12 is the last day of the pay cycle that day was part of. Often, these are two different dates. If you've paid out all funds owed (both regular pay and any other funds, such as vacation) within the same payroll, the system will automatically populate this field with the correct date. *If you pay out vacation pay or other monies owed in an extra payroll after* you paid out earnings for the last day of work,** then you will need to edit this field in-app to reflect the actual final pay period ending date.
Block 15	Block 15 is comprised of: Block 15A - Total insurable hours Block 15B - Total insurable earnings Block 15C - Insurable earnings by pay period	Ensure earnings and hours in block 15c. PP 01 accurately reflects separation payments when you add or update amounts in this step. The employer takes responsibility for the accuracy of these changes. Did you run an off-cycle payroll? All regular and off-cycle payrolls should be reported on the ROE. If the off-cycle payroll falls between regular payrolls, the hours and amounts of the off-cycle payroll will be added to the pay period with the regular cycle end date. If the last payroll is an off-cycle, the hours, amount and cycle end date of the off cycle will be reported in PP1 in Block 15.
Block 16: Reason for the termination	The reason for the termination, selected from the list of codes provided by Service Canada.	Ensure that Block 16 on the ROE is filled out with a valid first name, last name and Canadian phone number. Leaving this field blank, or writing in a general department name, like “Accounting, can result in your ROE being rejected by Service Canada. Only use “K00” code when the reason for termination does not fall under any of the other provided “K” codes/reasons. Should K00 have to be used for any reason, a note in Block 18 of the ROE is required.
Box 17A: Vacation pay	In this block, enter any vacation pay the employer has paid or will pay to the employee because of the separation. Vacation pay has different rules depending on how it’s being paid. If you're unsure, please consult this resource from Service Canada.	Vacation pay has different rules depending on how it’s being paid. When the employee's vacation is set to be paid out each pay, Wagepoint will automatically state the reason code as included in each pay. You don't need to add anything to box 17. If the employee's vacation is set to accrue (or is not applicable) and you pay out vacation on the final payroll, Wagepoint will automatically report that amount as vacation pay in box 17 and include the reason "paid because no longer working" on the ROE. If you need to remove that amount from Box 17 for any reason, you will need to reduce that vacation amount from PP1 in Box 15c.
Block 18: Comments	For any additional information that is not already shared on the ROE.	Including a comment in Block 18 can slow down your electronic ROE, as it requires a Service Canada agent to manually review it. For this reason, only use this block to indicate necessary information not already shared on the ROE, such as: additional information about the reason for separation; additional information about paid sick leave, wage loss insurance or maternity/parental payments; a note regarding vacation pay paid due to an anniversary payout that includes the date and amount paid.

If you are unsure about any of the above fields (or any other fields in the ROE), we highly recommend that you consult this guide from Service Canada. This guide includes some helpful explanations and examples of how to handle less common situations.

What’s next?

Once the ROE is submitted to Service Canada, you'll wait to see if it's approved or rejected. You can check in on your ROE by navigating to Payroll > Record of Employment.

If your ROE is accepted, you're good to go! If your ROE is rejected, Service Canada will typically include further information identifying how you can correct the ROE and resubmit.

FAQs: Termination and final pay

If you have set the employee’s status to termination pending, then the vacation pay will populate in your payroll automatically. You may need to run an extra payroll or include it with the person’s regular final pay.
Yes, if the employee’s status is set to Termination pending when the vacation is paid out. If the employee is not marked as Termination pending, then the vacation calculation will not take into account the final pay and you will need to manually calculate it and add it to the vacation pay balance that you are paying out.
Off-boarding a contractor is the same process, except you do not need to create an ROE. Same with owners or people who are EI exempt.
If you already filed the ROE, you need to amend the ROE. If you didn’t file the ROE yet, you should delete it, run the payroll, wait for payroll to finalize, and then re-start the ROE. You could also edit the ROE if it hasn’t been totally created.
If you are required to issue payment prior to the next regular payroll and you are on the Solo plan, then you’ll need to upgrade to the Unlimited plan to run a second payroll during the same billing period. Don’t worry, you can change your plan back to Solo for the following month.
This often happens if the employee has been archived. You’ll need to unarchive the employee so they appear in your People list again.