Gusto – Handling Inactive Employees in Payroll

Overview

Occasionally, an inactive employee (someone no longer with the company) may still appear when running payroll. Gusto does not automatically exclude inactive employees, so they must be skipped manually.

To reduce friction and prevent errors, Hour Timesheet now automatically syncs with Gusto. Once an employee is skipped in Gusto, they are removed from Hour Timesheet payroll for that specific pay period.
No extra cleanup. No duplicate work. No surprises.

When to Use This

Use this process if:

• An inactive employee appears during payroll

• You want to ensure they are excluded from both Gusto and Hour Timesheet payroll for the current pay period

How to Skip an Employee on Payroll (Gusto)

1. Go to Gusto > Pay

2. Click Run for the target pay period

3. Locate the employee(s) you want to exclude

4. Check the box next to the target employee(s)

5. Click Actions

6. Select Skip on Payroll

That’s it on the Gusto side.

Final Step in Hour Timesheet

After skipping the employee(s) in Gusto:

1. Refresh the page in Hour Timesheet

2. Run payroll as normal

The skipped employee(s) will no longer appear in Hour Timesheet for that pay period.

Important Notes

• This removal applies only to the selected pay period

• Future pay periods are unaffected

• If you forget to refresh Hour Timesheet, it won’t magically know what you did (yet)

Why This Matters

This approach:

• Prevents inactive employees from being accidentally paid

• Keeps Gusto and Hour Timesheet in sync

• Reduces manual corrections and payroll reruns