When you have an employee that's leaving the organization, they'll have a final paycheque as expected.  However, the employee will probably also have some accrued vacation pay that's owed to them.  The suggestion is to turn off the retained vacation pay before the accrued-vacation-pay payout, because BC and Ontario pay vacation on vacation pay.  Note this is a generic procedure that can be used for any province, and is suggested for all provinces as provincial law can change from time-to-time.

Step-by-step guide

Employee's last paycheques

  1. Add a timecard as per regular procedure for your employee's last regular paycheque (note this is not the very final paycheque).
  2. The last regular timecard's pay amount may have to be adjusted manually.  For example, if the person is paid a salary but only half of the final pay-period was worked, then the payment will have to be halved manually.
  3. Post the regular timecard so the employee's accrued vacation is updated.
  4. From the Payroll → Employees tab, open the employee and note their "Vacation Owed" amount under the "Amounts" tab:

  5. Uncheck the "Retain Vacation" checkbox on the bottom-right and then save-and-close the employee.
  6. Go back to the "Timecard Batches" tab and open your prior batch (or create a new one if you want).
  7. Click the bottom empty row's field under the "Employee No" column and select the employee that's leaving.
  8. Note that the "Period" value should appear with an incremented suffix to indicate an additional paycheque for this pay period (and "Irregular" should be checked).  It also helps to have the "Vacation Owed" column visible here:

  9. Select the irregular vacation-payout paycheque and set the "Type" to "Vacation" and the "Pay" to the accrued vacation amount owed:

  10. You can now post the very final vacation-payout paycheque.
  11. To verify it was done correctly, open the employee's "Amounts" tab again, and "Vacation Owed" should be zero: