Dismiss and rehire US employees (for admins)

Summary

This article explains how admins can dismiss or rehire employees in Gusto. It covers how dismissals affect payroll, benefits, and compliance, along with step-by-step instructions to dismiss, pay, or rehire employees. You’ll also learn about timelines, notifications, and important state law requirements.

Content

Admins with the right permissions can dismiss (terminate) or rehire employees directly in Gusto. If you do not see the option to dismiss, contact the primary admin on your account.

Dismissing an employee affects payroll, benefits, and compliance. This article explains what happens, what notifications are sent, and what laws may apply.

If you need to:

Pay a dismissed employee

When you dismiss an employee, you can choose to pay severance in the dismissal payroll (find the dismissal payroll in the Offboarding tab).

If you already ran the dismissal payroll but still need to pay severance—or another type of earning—run an off-cycle payroll.

Pay a dismissed employee (after you've run the dismissal payroll)

You must have the right admin permissions to run this payroll.

  1. Sign in to Gusto.
  2. In the left menu, click People.
  3. Click the Dismissed tab.
  4. Click the employee’s name.
  5. Under Information, click Pay.
  6. Scroll to the Recent paystubs section.
  7. Click Run off-cycle payroll.
  8. Click + Other Earnings.
  9. Enter the work period.
  10. Enter the payment date.
  11. Choose how deductions and contributions should be handled. 
  12. Review or edit tax withholding rates.
  13. In the Hours and additional earnings section, click + Other Earnings
  14. Scroll down and enter the severance amount in the Severance field. This option only shows if the employee has been dismissed.
    • Severance pay will not count toward an employee’s 401(k) if the plan is managed outside of Gusto or through an integrated provider.
  15. (Optional) Click Add Personal Note to include a message about severance on the paystub.
  16. Click Save & Continue.
  17. Click Submit Payroll.

*It’s our policy to guarantee lifetime access of payroll information to all users, subject to compliance with our Terms of Service.

Solution Properties

Keywords
dismiss furlough change date dismissal compliance rehire remove delete termination terminate terminated reactivate account duplicate layoff lay laid off deceased employee passed away off payroll inactive inactivate terminate view former day offboard final
Solution ID
110807134100000
Last Modified Date
09/25/2025 12:43:04 PM
Attributes
Gusto Attributes
  • Role: Employers; Accountants/Partners
  • Category: People
  • Plan type: Core; Complete; Concierge
  • Who brokers my benefits?: A third party; Gusto
Taxonomy
  • Employers and admins > People > Dismissals
Collections
  • Admins
  • External
  • Support Agent
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