Additional Correction Scenarios

This topic provides examples of correction scenarios that you can manage using Global Payroll for Spain.

Example of a Correction Affecting a Month with Retro

Assume that you have run a May payroll for an employee. This payroll process includes retro processing for April due to a salary increase that was made effective as of April, and overtime entered retroactively for April.

For the May payroll run, the system:

  • Calculates the IRPF RTR deduction to compute taxes for retro deltas.

  • Applies current recalculated tax percentages to the retro deltas.

After finalizing and paying the May payroll, you realize that there was additional overtime that needs to be paid in May. You enter the additional overtime as positive input and create an off-cycle correction calendar to process it. This off-cycle correction recalculates the May payroll and includes the added overtime.

  • Retro deltas that were executed during the first run of the May payroll.

  • The most recent results for the May calendar.

Example of a Correction Affecting a Month without Retro and Previous Months with Retro

Assume that you have run a May payroll for an employee that does not include any retro processing. After finalizing and paying the May payroll, you are informed that the employee should have received both a salary increase effective for April and overtime for April. Because you have not yet processed the legal reports, you decide to run a correction calendar for May to process the retro changes for April.

During the correction process, the system:

  • Takes the salary increase into account for the recalculation of the May payroll.

  • Recalculates the tax percentage for May.

  • Forwards the retro deltas for April to the correction calendar because it is the calendar that triggered the retro processing.

  • Generates negative net pay for the correction calendar because it processes only the tax deductions that are linked to the retro deltas.

  • Stores the retro deltas to the corresponding tax result record.

  • Recalculates the tax percentage to account for the impact of the retro deltas on the tax base. The system calculates the new taxable base using the last calculated base (recalculation for May) plus the retro deltas being forwarded to the correction calendar.

    Note:

    The value of the CLI VR CAL TAX PCT setup variable must be Y for the system to recalculate the tax percentage.

    See Setup Variables for Corrections.

When you run the official reports, the system takes into account the last calculation for May and the retro deltas from April.

Example of a Correction Affecting a Month with Retro and Previous Months with Retro

Assume that you have run a June payroll for an employee that includes retro processing affecting May due to a salary increase that was effective in May and overtime entered retroactively for May. The system calculated retro deltas during this June payroll calculation. After finalizing and paying the June payroll, you are informed that the salary increase should have been effective for April and for an increased amount, and that there was additional overtime that should have been entered for April. Because you have not yet processed the legal reports, you decide to run a correction calendar for June to process the retro changes for April and May.

During the correction process, the system:

  • Takes the salary increase into account for the recalculation of the June payroll.

  • Maintains the values of the retro deltas associated with the original June calendar and forwards the new retro deltas from both April and May to the correction calendar.

  • Generates new results for the extra period.

  • Generates negative net pay for the correction calendar because it processes only the tax deductions that are linked to the retro deltas.

  • Stores the retro deltas to the corresponding tax result record.

  • Recalculates the tax percentage to account for the impact of the retro deltas on the tax base. The system calculates the new taxable base using the last calculated base (recalculation for June) plus the retro deltas being forwarded to the correction calendar.

    Note:

    The value of the CLI VR CAL TAX PCT setup variable must be Y for the system to recalculate the tax percentage.

    See Setup Variables for Corrections.

When you run the official reports, the system takes into account the last calculation for June and the retro deltas from both April and May.