Making Corrections
This topic discusses:
Using corrections in the UK
Entering corrections.
Corrections enable you to correct the results of a finalized payroll before the next scheduled payroll run. Essentially, you use corrections to make changes that would normally be corrected by retroactivity processing in the next payroll.
Here are some examples when you may use corrections in the U.K:
Late notification of new employees.
Use corrections to pay employees who were hired in the previous period but were not processed in payroll.
Pay changes.
If an employee has a retrospective change in salary or other earnings, you can use corrections to calculate the changes and pay the employee before the next scheduled payroll run.
Late notification of terminations.
Use corrections to correct the payroll results of an employee who left employment in the previous period but was incorrectly processed as an active employee.
Retrospective NI category code changes.
Use corrections to recalculate National Insurance when an employee's NI category is retrospectively changed.
Retrospective change of hire date.
Use corrections to recalculate employees' pay and correct accumulators when an employee's pay has been processed using an incorrect hire, rehire, or transfer date.
Note: Corrections are only processed if retro triggers already exist.
Enter the correction details on the Correction Request Detail page. The two fields in the Method of Correction group box define how the correction works:
Field or Control |
Description |
|---|---|
Type of Correction |
Select Replacement or Forced Reversal. A replacement is used when a calculation in the finalized payroll was incorrect, for example if a payee's overtime was incorrect. A forced reversal is used to correct payments made in error. |
Retro Method |
Select one of these values: Use Existing Retro Rules: To use the default retroactive method determined by the triggers generated. Forced Corrective: To use the corrective retroactive method. |
This table explains the four types of corrections that you can create and how these are used in the U.K:
|
Type of Correction |
Retro Method |
Description |
|---|---|---|
|
Replacement |
Use Existing Retro Rules |
This is a replacement using the retroactive method determined by the generated triggers. This is the most common type of correction you will make. |
|
Replacement |
Forced Corrective |
A replacement using the corrective retroactive method. No elements are forwarded and any deltas must be managed in another way. |
|
Forced Reversal |
Use Existing Retro Rules |
This is a reversal using the retroactive method determined by the triggers, which means that all elements are recalculated and forwarded and the retro process override list is ignored. |
|
Forced Reversal |
Forced Corrective |
A reversal using the corrective retroactive method. The original calculation is reversed and there are no elements forwarded. |
Example: Late Hire
Consider the example of an employee who was hired in a finalized period, but the employee was not processed. How you enter a correction for this employee depends on the timing of the correction:
If the accounting period is closed and the HM Revenue and Customs (HMRC) payment has been completed, select Replacement in the Type of Correction field and Use Existing Retro Rules in the Retro Method field.
For this type of correction, the Target Period is the next open period. The retro method processed depends on the retro method linked to the generated trigger.
If the hire occurred within the most recently processed period, the accounting period is not closed and the HMRC payment has not been made, select Replacement in the Type of Correction field and Forced Corrective in the Retro Method field.
Using these settings, the hire is processed within the period in which the hire actually occurred. Therefore, the Target Period is the most recently processed period.
Example: Change in Pay
In the example of a change to pay, there are three possibilities:
The employee is owed money.
Select Replacement in the Type of Correction field and Use Existing Retro Rules in the Retro Method field to use the retro method determined by the generated trigger. Select the next open period as the Target Period.
The employee was overpaid and he or she will be processed in the next scheduled payroll.
In this situation, we recommend that you do not use a correction, but let the retro calculation deduct the overpayment in the next regular payroll run. If overpayment is processed using off-cycle processing, the negative pay is forwarded to the next target period. However, because it is an off-cycle process, there is no positive pay from which to deduct the overpayment. The negative pay will then have to be managed, possibly as a deduction from the next regular payroll run.
The employee was overpaid and he or she will not be processed in the next scheduled payroll.
In this example, select Replacement in the Type of Correction field and either Use Existing Retro Rules or Forced Corrective in the Retro Method field. However, the result of the correction will be a negative net pay and you will need to determine how to collect the overpayment.
Example: Late Termination
Consider the example of an employee terminated in the previous (finalized) period who was processed as an active employee. You process this as a reversal as follows:
If the employee has already been paid (bank transfer is completed), select Forced Reversal in the Type of Correction field and Use Existing Retro Rules in the Retro Method field.
The Target Period is the next open period. This correction sets all results for the finalized period to zero and forwards the negative pay to the next open period.
If the employee has not been paid (bank transfer stopped), select Forced Reversal in the Type of Correction field and Forced Corrective in the Retro Method field.
The Target Period is the previous finalized period. In this case, the correction sets all results for the finalized period to zero and there are no elements forwarded.