Processing Retroactive Payments

This section discusses the default retro method of forwarding and the ability to change it to the corrective method.

The default retro method and the on conflict retro method for Hong Kong are both forwarding. Global Payroll core application retro processing meets all requirements for processing retroactive payments in Hong Kong.

While forwarding retro is the default retro method for Hong Kong, you can still use the corrective retro method. If you use corrective retro, ensure that all periods before the start of the current tax year (April 1 to March 31) are forwarded to the current year. For example, if in May an employee was paid a backdated increase for the period January to April, you can use corrective retro for the period in the current tax year (April), but use forwarding retro for the period in the prior tax year (January to March). For more information on the off cycle processing for Hong Kong, see Understanding Off-Cycle Processing.

Note: The default retro method for Mandatory Provident Fund (MPF) calculations is forwarding. If a retroactive payment is related to MPF relevant income, then the system forwards the delta to the current payroll period to calculate MPF. If you use the corrective retro method for MPF calculation, then the retroactive payment is calculated for the payroll period that you correct. If you choose to use the Forced Corrective option, then you must set up off-cycle payment processing on the Off Cycle On Demand page prior to the calculation.