Making corrections to incorrect or missing pays
The correct method is to follow the the Pay Process guide (also available under Help)
1. If an error is noted after the payrun has been completed (and no other pays have been processed)
- Tools..Restore (refer Pay Process guide)
- correct and Finish Pay (you may need to pay the employee the difference, or recoup it from their next pay if they owe you)
2. If error is noted and pays have been processed since
- start a TeamViewer support session with the HelpDesk to assist you to recall the employee's history entry for correction (there must be no other pays in progress) or to recall an entire batch
- correct and Finish Pay (you may need to pay the employee the difference, or recoup it from their next pay if they owe you)
3. Missing pay
- set pay dates correctly (particularly the payday)
- process missing pay
The wrong method...
If it has been your practise to process a "correcting" pay because an entry was omitted, then you need to be aware of the following pitfalls:
- it won't work for an overpayment (*you cannot process a negative value pay*)
- the tax calculation will seldom be correct for the revised earnings for the whole period (*which is why there should only ever be one pay per period, and is why SmoothPay warns if you try to pay the same staff a second time*). Consider this case:
- employee paid for 1 week, $321 gross, tax code M, tax $41.79
- correcting pay for an additional $121, tax $14.38
- total tax $56.17
- tax error: actual gross is $442, tax should be $64.64 (short by $8.47)
- the employee may have "per pay period" deductions and/or allowances: child support, student loan, court fines, other garnishee orders or fixed allowances - which will have been calculated a second time unless managed correctly (*the govt agency orders, in NZ especially, rely on total earnings for the pay period to be calculated correctly, so in the event any employee has any of these then it's likely to be calculated incorrectly*)
- the Holidays Act requires capture of days paid - this is normally done per pay period, and when you make a correcting pay you may inadvertently double the days paid - so diluting Average Daily Pay calculations
Correcting a pay, by processing a correcting pay, is not the correct method.
Mitigate issues that may have arisen from additional correction pays (NZ)
Under NZ legislation it is particularly important that days paid is captured correctly - you can edit these in the employee's History if needed.
Unfortunately there's not much you can do for over/underpaid garnishee orders, student loan, tax or allowances
Correcting a pay, by processing a correcting pay, is not the correct method.
Other ways to perform a correction between pays
Sometimes it just doesn't fit the process to restore and correct the pay, so in the simplest of cases (an underpayment) you can do this:
- make a cash advance (no payroll process required) for the estimated value of the shortfall
- recoup it as a sundry deduction next pay
Warnings
NZ sites (and countries where leave accrues annually rather than per pay period) using any of the recall methods (other than Restore) must determine if any employee had accrued leave in the period being corrected.
A recall will NOT reset the employee's anniversary date, so their accrual will disappear and needs to be manually reinstated if necessary.
Further reading