How Retroactive Pay Is Calculated

Retroactive pay is the recalculation of prior payroll results because of changes that occurred after the original payroll calculation run.

For example, an employee receives a backdated salary award or a performance bonus.

You run the Recalculate Payroll for Retroactive Changes process to calculate retroactive pay. This process creates retroactive element entries based on retroactive events.

Note:

Only the elements that have retroactive pay enabled will have retroactive results calculated.

Set up Elements for Retroactive Pay

To enable retroactive processing of an element:

On the Event Groups page, review the types of changes that automatically trigger a retroactive notification for the predefined event group, called Entry Changes for Retro. It is recommended you use this group or you can create a new event group for the element, if required.
On the Element Additional Details page, select Yes for these questions:
- Is this element subject to proration?
- Is this element subject to retroactive changes?
On the Element page, select the predefined event group or a new group that you have created.

Note: This step is only if you want to attach your new group to an existing element. If your group exists and you are using the template to create the element, you do not need to navigate to the element page. You can attach the group from the template.
This step is only if you want to have a different element pay the retroactive adjustment.
On the Retroactive Components page, create a full retroactive calculation with a reprocess type of 'Reprocess' and choose 'Yes' for the default component.
In the Retroactive Pay Elements section of the Retroactive Components page, create an entry with effective dates, adjustment type of 'Standard' and choose the target element of the results element that you want the retroactive pay process to use when creating a retroactive entry.

Note:
This step is only if you want to have a different element pay the retroactive adjustment.

Process Retroactive Pay

Whether creating a flow pattern for retroactive tasks, incorporating tasks into a Payroll Cycle flow pattern, or running individual processes, it is advised to run them in the following order:

Submit the Retroactive Notifications Report.

Note: You can also Review or create retroactive events on the Event Notifications page and download results to Excel to view retroactive events in a report format.
Submit the Recalculate Payroll for Retroactive Changes process with the Submit a Flow task or the process may run automatically as part of your payroll flow.
Note: This process creates one or more retroactive entries to receive the process results and never overwrites historical payroll data.
Submit the Retroactive Entries Report.
Review the Retroactive Entries Report.
Submit the Calculate Payroll process.

Note:

Always run the Recalculate Payroll for Retroactive Changes process immediately before you run a payroll. Otherwise, if you run it after the Calculate Payroll process, retroactive adjustments are held over until the next payroll period.

If you don't get the expected retroactive notification, here are some suggestions to review:

The transaction that caused the event
Element setup
Element eligibility for the person
The retroactive event group entities and attributes that are set up to trigger retroactive events
The proration event group entities and attributes setup that triggers proration

Exclude Retroactive Element from the Retroactive Pay Process

If you enabled the element for retroactive pay but now you don't want it included in the process, follow these steps to prevent it from being considered in the process comparison:

On the Element Additional Details page, Remove the two retroactive components rows.
On the Event Groups page, remove the event group.

Note:

To process an element in a retroactive payroll run, the element must have retroactive components that define the processing rules. These steps remove these defined processing rules and disable event notifications.