How to record severance pay and have it show on the check as severance pay
Use a Pay Item to show that you are paying Severance Pay
Set up a Severance Pay pay item in Payroll → Setup → Pay Item. For more details on adding a pay item, see the Help Article, Enter Pay Items.
Then add the pay item to the employee record using the Pay Data link. For more details on adding a pay item tot he employee record, see the Help Article, Enter Employee Information → Pay Data.
Use Severance Pay in the Pay Description field and apply the correct Gross Pay account for the employee. When you run Payroll you may edit the time card to update the amount.