Retire the Employee means that this employee is resigning from the company. Either through voluntary act or otherwise, you need to perform these steps to remove the Employee from the payroll run.
1) Go and select his/her Employee Information.
2) Go to the Employment tab. Click End Employment.
3) You will see this pop up modal and you are required to fill in the fields (refer to the image below).
4) Lastly, make sure you click button End Employment to remove his/her employment active status to history.