Payment to deceased employees family

We had an employee who sadly passed away last month. Our payroll provider marked his record with a death and payroll was processed as normal in the month. We would like to pay his wife 2 months of his salary. However, we can't put it through payroll now as his record is closed. How do we treat this payment? Would we have to set up his wife as an employee, albeit briefly, and pay her and tax accordingly? I don't know her personal situation but if she is on benefits this would probably have an impact on them.

If it is a death in service benefit you can make this payment via the payroll software as a payment after leaving and it may be tax free / allowed to use the old tax code (any payments due to the beneficiaries' that are related to the deceased persons earnings have no NI liability - change this to category X). More information can be found: https://www.gov.uk/what-to-do-when-an-employee-dies/paying-pensioner-died#:~:text=You%20must%20make%20all%20outstanding,out%20their%20final%20pension%20payment. You can make payments for monies owed using the employee's details, and ask the payroll provider to update the bank details to that of the wife (they can do this). If the wife is not an employee steer clear as making her so to make this payment.

Hi Barry McQuillan,

Yes, you can set the wife up to pay the money and then close their records.

Thank you.

Thanks for the responses. The payment is going to go through with the tax code 0T. As it is 2 months wages in one go, our payroll provider is saying that the payment falls into the 40% tax bracket, is this correct? (I understand the tax thresholds and it may go over but does the cumulative pay already earned mean anything? i.e. on a cumulative basis the pay would be well within the 20% tax bracket)

Hi Barry McQuillan,
 Sorry, but we will reqquire more information to answer your question.
Please call the employers helpline on 0300 200 3200 and we can discuss this with you. 
Employers: general enquiries
Thank you.