This article explains how to initiate termination or resignation for a PEO (Professional Employer Organization) employee, commonly known as "offboarding."

Before you begin:

Please review our article on Mutual Termination Agreements, which is a common practice that enables an employer to terminate an employee while minimizing the risk of litigation.

The termination payout requirements vary for each US state. If the on-demand payroll is caused by a termination in a state where the termination payout deadline is lower than 3 business days, make sure to communicate the termination to Deel at least 72 hours in advance, otherwise it won't be possible to meet the payout deadline.

For detailed information about the payout deadline for every state, see On-Demand Payroll Deadlines for Terminations.

Offboarding a PEO employee

✅ Step 1 – Schedule a termination request

Select the (1) People icon, the (2) All People tab, and then click the employee you want to terminate.

From that employee's profile overview page, select the (3) three-dot action menu and click Schedule termination.

✅ Step 2 - Fill in the Termination Details 

Select the termination type (either resignation or termination) and provide a complete explanation of the reason for ending the employment.

Fill out all other details, including your desired end contract date. Please note that your confirmed contract end date may differ from the desired end date due to labor laws and Deel's terms of service.

Important Note on Termination Dates: The termination date should always reflect the employee’s last day worked. It should not include severance pay dates, pay in lieu of notice, garden leave, or COBRA coverage periods.

Using an incorrect date can delay or negatively impact unemployment insurance outcomes for employees. If you have any questions regarding which date to use, please contact your HR Experience Manager through the Deel platform.

✅ Step 3 - Add severance details

On the Severance details tab, select whether the employee will receive severance.

If no severance is required: Select "The employee will not receive severance" and continue. No further action is needed for severance.

If severance is required: Select the second option and enter the severance amount using one of two methods:

• By time — Select a number of weeks (or other time unit). Deel will display a forecasted estimate of the payout amount. 
  • Note that this is an estimate only and the final amount may differ.
• By cash value — Enter a fixed dollar amount directly.

Next, indicate whether a severance agreement is required:

Once you complete this step, the termination summary screen will show a Severance details box confirming the amount entered, whether an agreement is pending upload, and how the payment will be processed.

✅ Step 4 - Submit termination request

After filling in all termination details, click Finish.

Deel will review the termination request and notify you of the next steps. Once the request is approved, the employee's contract details page will reflect that their contract is ending.

✅ Step 5 - Upload the signed severance agreement (if required)

If a severance agreement was indicated during the termination flow, you can upload the signed document from the Offboarding tracker after it has been signed by both parties.

To upload the agreement:

1. Go to Offboarding tracker and find the employee.
2. Select Contract ending details and click View to open the side panel.
3. In the Severance details section, click Upload.
4. Add or drag your file into the upload area, then click Upload to submit.

Important: Only upload the signed agreement after any applicable waiting period has passed.

Once the agreement is uploaded, the off-cycle payment is created automatically.

Need to adjust the severance amount? If the amount changed after the termination was initiated - for example, due to negotiations - you can update it directly in the off-cycle payment before approving it. Once the off-cycle is approved, changes must follow the standard off-cycle amendment process.

On-Demand Payroll Deadlines for Terminations

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The deadline to payout the final wage to an employee varies by state and it's determined by whether the employee resigned or was terminated by the company. This table lists such deadlines by state:

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