Defining Retroactivity in Brazil

Retroactivity is the process of going back in time and recalculating prior calendars because changes were made after the original calculation was run. When retroactive processing occurs for a payee, the system recalculates each element generated for the payee. The difference between these results is the retro delta.

In Global Payroll, there are two methods for calculating retro:

• Corrective

• Forwarding

Note:

In Brazil, all retro is handled with the forwarding method to comply with Brazilian legislation that requires all retroactive payments to be taxed in the current period. This includes both the Default retro method and the On Conflict retro method.

With the forwarding method, payments are calculated in the respective periods, but balance accumulators for the period are not updated. Only the segment accumulators are updated. Deltas are created for each earning, deduction, and segment accumulator used in the process list. These deltas, which are identified on the PeopleSoft Global Payroll: Retro Process Overrides Page, are forwarded to the current period.

The system generates a retro trigger every time you enter a change on the data described in the following sections.

Changes in the Employee's Data

Changes in employee data include compensation rate-related changes:

• Status.

• Compensation frequency.

• Standard hours.

• Pay system flag.

• Action for retroactive hire.

• Action for retroactive termination.

Changes in Other Data

Changes in other data include absence take-related changes:

• Positive input

• Pay group

Earnings and deductions are recalculated and a difference results.

Note:

Not all earnings or deductions will have an adjustment for retro. Some of the earnings and deductions are forwarded to one earning or deduction, which then appears as a single adjustment in the current period.