What to do when an employee dies
Paying an employee who has died
You must make all outstanding payments when an employee dies.
Put the date they died into the ‘Date of leaving’ field in your next Full Payment Submission (FPS), and deduct tax using their existing tax code. Use category letter X so that you do not deduct National Insurance. Do not produce a P45.
Payments to a person who has died are usually made to the personal representative or executor of that person’s estate.
If you make a mistake
If an employee dies and you did not report it in the right FPS, follow the guidance for when an employee leaves.
Making a late payment
If you need to pay someone after you’ve sent an FPS with their ‘Date of leaving’ (the date they died):
- use tax code 0T on a ‘week 1’ or ‘month 1’ basis
- include their ‘Date of leaving’ and put ‘Yes’ in the ‘Payment after leaving indicator’ field in your FPS
- choose ‘H - Correction to an earlier submission’ in the ‘Late payment reason’ field
- update the year-to-date figures - or if it’s a new tax year, make sure the year-to-date figures only include the additional payment