How to enter a Payroll Adjustment record?
Navigation: Year End Close>>Payroll Adjustments
Payroll adjustments can be used to update Year-to-Date figures throughout the year for any cycle that is already run and archived. This feature should only be used if absolutely necessary and should be done before the Year End Close.
The Payroll Adjustment is different from a Year End Adjustment as a Year End Adjustment allows you to edit only statutory reports and not data for any individual payroll run or cycle.
This function can also be used in instances where:
- An employee was not paid the correct amount (Salary or Rate);
- An Allowance was not given to an employee or the incorrect amount given;
- A Deduction was not taken out from an employee’s salary, or an incorrect amount taken;
- A Deduction was not taken from the employer or an incorrect amount taken;
- An employee was not paid his/her overtime compensation or an incorrect amount was paid, etc.
Note, Payroll Adjustments do not replace the Out-of-Cycle feature.
There are four steps in a Payroll Adjustment:
Step 1 - Enter an Adjustment Reason
Step 2 - Enter the Adjustment Transactions
Step 1 - Enter an Adjustment Reason
Navigation: Year End Close>>Payroll Adjustments>>Adjustment Reasons
- Similar to the Transaction Reason Codes & Descriptions, we must first enter a reason why we wish to carry out a Payroll Adjustment to a cycle that was run and archived. This is for record keeping purposes and has no impact on the Payroll.
- Click on the New Record hyperlink.
- Enter a Reason Code and Reason Description. In this example we are missing a deduction that should have been taken out of an employee’s salary, thus the reason is ‘ Missing Deduction’
- You can enter as many user-defined adjustment reasons as needed.
- Save the record and repeat as needed.
Step 2 - Enter the Adjustment Transactions
Navigation: Year End Close >> Payroll Adjustment>> Adjustment Transactions
- In this example, we will deduct a contribution of $150.00 from Dyllon Anderson’s salary towards the company’s sports day held in March 2018.
- Click on New Record and select the Pay Group the employee belongs to as well as the Company, Badge Number, Last Name and First Name.
- Select the appropriate Entry Type that this adjustment will be applied to. In our example we are making an adjustment to an employee’s deductions from their salary. Therefore, we have selected ‘DEDUCTIONS’. Adjustments can also be made to Allowances, Other Income, Pay Profile, Timesheets and Vacation Entry Types.
- Once the Entry Type is Selected, all Item Types associated with the Entry Type will become available for selection. In this example, we will be entering a Sport Day Fee deduction. Note, this list are all deductions that were set up in the application in the Payroll Setup. (Navigation: POWERpay>> Maintenance>> Payroll Setup>> Deductions>> Deduction Listing)
- Use the search icon to lookup the Reason Code and Reason Description (created in Step 1). Click on the Select hyperlink of the record that you would like to choose. Select the Reason Code and Reason Description from the list. Pay Year & Adjustment Cycle: Enter the year and Cycle in which the changes are to be applied.
- Out of Cycle: Select ‘Yes’ if the adjustment will be for an out-of-cycle payroll run. If it is for a normal cycle, select ‘No’.
- Adjustment Amount: Enter the amount of the adjustment. Note, the amount can be a positve or negative figure.
- Apply Adjustment To: Select accordingly
- Batch No.: Enter accordingly.
Step 3 - Run the Payroll Adjustment
- You can enter as many Payroll Adjustment Transactions as needed. Once you have verified the data, you can run the Payroll Adjustment.
- Select the transaction(s) by clicking on the radio button to the left of each record that you would like to run Click on the Run button.
- Note, these changes are irreversible. Please ensure the record is accurate before you run.
- Upon clicking on the Run button, a pop-up notification will appear, reminding you that, once run, the transaction is not reversible. Click ‘OK’ to continue.
- You will be notified by a second pop-up once the Payroll Adjustment run has been successful.
- Upon a successful Payroll Transaction run, you will notice that the record is no longer visible in the Adjustment Transactions screen. Instead, it becomes housed within the Search Transaction History Tab.
Step 4 - See the Results (Before and After the Adjustment)
Navigation: Payroll Reports>> Payroll Reports>> Register Reports>> Cycle Pay Register
BEFORE THE ADJUSTMENT
- Prior to running the Payroll Adjustment, we can view the employee’s Pay Slip or the Cycle Pay Register report. In this example the employee is missing a sports day contribution, thus the Adjustment reason of 'Missing Deduction'.
AFTER THE ADJUSTMENT
- After the Payroll Adjustment run, we can see that within the Cycle Pay Register, the previously missing Sports Day Fee has been correctly deducted from Dyllon Anderson’s salary.
Warning - BE CAREFUL when entering the Adjustment Amounts. Take a look at how we enter an increase or decreased adjustment amount.
- Note: If the adjustment is an increase in the figure that already exists, only enter the difference between the current figure and the new figure in the Adjustment Transaction screen.
For example:
- The current Sports Day Fee deducted from the employee’s salary is $150.00
- If we wanted to increase the Sports Day Fee to reflect a total deduction of $225, we need to enter a Payroll Adjustment Transaction with an Adjustment Amount of $75.00 for the employee.
- Note the Reason Description that we have chosen.
- Run the Payroll Adjustment for the new figure to be reflected on the employee’s Pay Slip / Cycle Pay Register.
- Similarly, if the adjustment is a decrease in the figure that already exists, only enter the difference between the current figure and the new figure with a NEGATIVE SIGN (-) in the Adjustment Transaction screen.
For example:
- The current Sports Day Fee deducted from the employee’s salary is $150.00
- If we wanted to decrease the Sports Day Fee to reflect a total deduction of $100, we need to enter a Payroll Adjustment Transaction with an Adjustment Amount of -$50.00 for the employee.
- Note the Reason Description that we have chosen.
- Run the Payroll Adjustment for the new figure to be reflected on the employee’s Pay Slip / Cycle Pay Register.
You have now successfully completed a Payroll Adjustment. Repeat as required.
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