How to do a Year End Adjustment?
- Sometimes, errors are made when entering employees’ earnings throughout the year, or perhaps the necessary flags were omitted in error when setting up HRplus and the correct statutory deductions were not calculated for some employees. In these instances, it becomes necessary to adjust employees’ tax amounts or gross pay prior to closing out the payroll for the year. This can be accommodated via the Year End Adjustments feature.
- Year End Adjustments do not affect the actual payroll data and are only reflected on the year-end statutory (tax) forms. This means that you will not see the changes reflected in the Cycle Pay Register reports or employee payslips as we have seen with a Payroll Adjustment.
There are Three Main steps:
Step 1 - Enter an Adjustment Reason
Step 2 - Enter the Adjustment Transaction
Step 3 - Save the Statutory Report
Navigation: Year End Close >> Payroll Adjustment>> Adjustment Reasons
Step 1 - Enter an Adjustment Reason
- Similar to the Transaction Reason Codes & Descriptions, we must first enter a reason why we wish to carry out a Year End Adjustment. 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.
- You can enter as many user-defined adjustment reasons as needed.
- Save the record and repeat as needed.
Step 2 - Enter the Adjustment Transaction
- In this example, we will enter a salary adjustment for the employee, Dyllon Anderson.
- 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 earnings. This will alter the figure displayed in the ‘Total Remuneration Before any Deduction’ on the TD5 tax form. Therefore, we have selected ‘Timesheets’. Note, adjustments can be made to Allowances, Deductions, Other Income, and Non-Cash Allowances.
- Once the Entry Type is Selected, all Items associated with the Entry Type will become available for selection.
- In our example, we will be adjusting the employees ‘Regular Pay’ or salary. Note, this list are all earn types that were set up in the application in the Payroll Setup. (Navigation: POWERpay>> Maintenance>> Payroll Setup>> Earnings>> Earn Types)
- 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.
- Pay Year & Adjustment Cycle: Enter the year and Cycle in which the changes are to be applied.
- Adjustment Amount: Enter the amount of the adjustment. Note, the amount can be a positive or negative figure. If a positive value is entered, then the amount will be added to the employee’s current Year-To-Date figure. Conversely, if a negative value is entered, it will be subtracted from the employee’s current Year-To-Date figure.
- In this example, Dyllon’s gross earnings for the year amounts to $30,932.90. We will enter an adjustment amount of $2,700.00. His expected Year-To-Date earnings, therefore, should be $33,632.90 after this Year End Adjustment.
- When completed, save the record and repeat as needed.
Step 3 - Save the Statutory Report
- To display the effects of the Year End Adjustment on the Statutory Report, you must save the Statutory Report within the Year End Adjustment folder.
- Note: you must save the relevant statutory report (in this case TD5 St. Lucia) for each employee adjustment you have made. Please ensure the pay year and pay group correspond to the employee(s) for whom the adjustment was made.
- Click ‘Save’.
REMINDER: This step is to be completed in the Year End Adjustment tab as it only affects the Statutory Report for the country.
- Upon clicking on the Save button, the application will ask you to verify the command. Click ‘Ok’ to continue.
- If you have already saved your Statutory Flags for the particular report, the application will recognise that this new save is an override.
- Click ‘OK’ to continue.
- A final pop-up notification will alert you when the data is successfully saved.
- Click ‘OK’.
Navigation: POWERpay>>Payroll Reports>>Payroll Reports>>St. Lucia Statutory Reports
- To view the change we made to the employee’s TD5 by entering the Year End Adjustment, we will generate the report entitled, ‘Print TD5 from Edit File’.
- We can now see the change to the employee’s earnings reflected in the ‘Total Remuneration before any deductions’ field.
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