Reporting the Death of an Employee in UK
Employers need to report any death that occurs in the workplace by contacting the police and the Health and Safety Executive (HSE).
HSE Incident Contact Centre
Telephone: 0845 300 9923
Monday to Friday: 8:30am to 5pm
You must also report deaths or serious injuries that happen during off-site work.
Important: Employers have been able to report all work-related incidents to the Health and Safety Executive for Northern Ireland (HSENI) since April 2013.
Paying an Employee after Death
The rules for employers about paying an employee who has died are clear. You cannot withhold any outstanding payments from your employee – even if they are no longer living.
When finalising payroll, put the date that they died into the field titled ‘Date of leaving’ in your next Full Payment Submission (FPS).
You should use their existing tax code to deduct any tax that is due. But, you should not deduct and pay National Insurance or produce a P45.
What if you failed to report an employee’s death in the correct Full Payment Submission? If it happens, follow the same guidelines as per payroll when an employee leaves (or retires).
How to Make a Late Payment?
In some cases, you may need to pay someone (e.g. an executor) after you already submitted an FPS with their ‘Date of leaving’ (date they died). If so, you should:
- Use tax code 0T on either a ‘week 1’ or ‘month 1’ basis.
- Include the date they died (titled ‘Date of leaving’) and insert ‘Yes’ in the FPS field marked ‘Payment after leaving indicator’.
- Select ‘H – Correction to an earlier submission’ in the field marked ‘Late payment reason’.
- Update the year-to-date figures (or ensure the year-to-date figures only include the additional payment if it goes into a new tax year).
Note: As a rule, employers would make payments to the executor of the will or personal representative of the deceased person’s estate.
Paying a Pensioner if they Die
Employers cannot withhold any outstanding payments from people who are receiving a workplace pension – even if the employee dies.
If it happens, you should record the date of death in the field marked ‘Date of leaving’ in your next FPS and then calculate their final pension payment.
How to Work Out Tax?
In most cases, you should use their existing tax code when working out tax (unless you make the payment in a new tax year). Use their new tax code if it goes into a new tax year and you did not report their ‘Date of leaving’ on an FPS.
Otherwise, you should be using tax code 0T on a ‘week 1’ or ‘month 1’ basis and then inserting ‘Yes’ in the field marked ‘Payment after leaving indicator’ in your FPS.
Recovering Overpayments from Executors
What happens if you already paid someone after their death (e.g. a company pension payment because you got a late notification)?
Note: Generally speaking, as an employer you would be able to get an overpayment back from an executor.
You would need to insert the date of death for the pensioner in your next FPS. Then, select ‘H – Correction to an earlier submission’ in the field marked ‘Late reporting reason’.
What if you are not aware of the actual date that they died? In this case, you should use the date of their final pension payment as their ‘Date of leaving’. Remember to amend the year-to-date figures if you do receive the overpayment.
It could move into a new tax year before you find out the actual date that one of your pensioner employees died. If so, you should:
- Insert ‘0.00’ in the year-to-date figures for pay and tax in your Full Payment Submission (FPS).
- Send HMRC (either):
- An Earlier Year Update (EYU).
- An FPS with the correct year to date figures for the previous tax year.
Note: The master section contains more information on how payroll works and the legal responsibilities of being an employer.