Making changes to generated pays - Adjustments & Edits

How to make changes to generated pays

Generated pays can be amended after the fact when the need arises. This can be done in response to:

  • Underpayment - Missing or incorrect items leading to the employee being paid less than they should have been.
  • Overpayment - Incorrect items leading to the employee being paid more than they should have been. 
  • Incorrect details - Incorrect items that affect reporting but have no financial impact on the employee. 

There are two methods for correcting inaccuracies on generated payslips.

  • Editing the generated payslip.
  • Creating an adjustment payslip. 

This article will cover:

  • Important information to know before starting.
  • How to edit a generated payslip.
  • How to create an adjustment payslip.
  • How to manage overpayments.

   Please note: Overpayments are complex to manage with pros and cons on both sides. Please ensure that you understand how this works and which option is best for your business. 

Before you start

There are two methods for correcting inaccuracies on generated payslips. Editing the payslip or creating an adjustment payslip.

The method you choose will depend on several factors. To help you decide which method is best for you, we will illustrate the similarities and differences between the 2 method options. Please consider the following before proceeding.

Similarities between edits and adjustments

The following is true for both an edit and an adjustment.

  • Most items can be added to the payslip.
    This includes:
    • Hours worked
    • Pay items and Allowances (not shift allowances - see below)
    • Shift penalties
    • Deductions (not paid to another account)
    • Leave (including cash out and termination payments)
    • Reimbursements
    • Employee and employer additional super contributions
  • Entitlement accruals, tax, and Super guarantee will automatically be calculated based on your changes. 
  • If your changes result in more money to be paid to the employee, an ABA file will be generated for you. 

Differences between edits and adjustments

There are some differences between editing a generated payslip and creating an adjustment. The following table highlights these differences.

Functionality Edit Payslip Adjustment Payslip
Payslip Maintains a single payslip Creates a separate payslip
Visibility Clear history for admin. Less clear for the employee.  Clear history for both admin & employee.
Can use negative values No Yes
Can reduce or remove leave entitlements Yes No
Can reduce or remove deductions Yes No
Shift allowances can be edited Yes No
Changes can be invoiced after invoices are generated No Yes

 

Edit a generated payslip

  • Payslip - Maintains a single payslip for the employee. Only the most recent version will be visible to them via the Employee App.
  • Admin visibility - Clear history of changes available to admin users. When making changes, an admin user is prompted to provide a reason for the edit. This is then stored against the payslip history, providing context for the changes. 
  • Employee visibility - As only a single payslip is maintained, changes made are not visible to the employee. 
  • Negative values - You cannot use negative values on a payslip edit. If you want to remove something you would delete the line instead. 
  • Leave - Leave taken can be reduced or removed when editing a generated payslip. 
  • Deductions - Deductions applied can be reduced or removed when editing a generated payslip. 
  • Shift allowances - Shift allowances can be edited or removed but not added. 
  • Invoices - If invoices have already been generated, any edits to generated payslips will not pull through to invoicing. You cannot generate a new invoice for the changes or regenerate existing invoices. In this instance, you would have to create a manual invoice. 

Create an adjustment

  • Payslip - A separate payslip is created for the adjustment. 
  • Visibility - With multiple payslips for the same period, the changes made are very clear to both the admin user & the employee. 
  • Negative values - When subtracting a line item on an adjustment, this is represented as a negative value. This provides clarity for the employee and the admin as to what has been removed on the adjustment payslip. 
  • Leave - Leave taken is unable to be edited or removed on an adjustment payslip. If you need to change this, an edit on the payslip will be required. 
  • Deductions - Deductions applied are unable to be edited or removed on an adjustment payslip. If you need to change this, an edit on the payslip will be required. 
  • Shift allowances - Shift allowances cannot be edited, removed, or added on an adjustment payslip. 
  • Invoices - If invoices have already been generated, a new invoice can still be generated for the adjustment payslip if the result is additional pay (and therefore charge). Depending on the changes you made, you may still need to review the invoicing to ensure that you're charging your client correctly. 

   Please note: If you have minimum entitlement accruals or super guarantee configured for an employee, these will trigger an adjustment payslip. If this is the case, you should edit the accrual rates back down on the adjustment or remove the minimum super guarantee amount from the profile temporarily. Failing to do so will mean that the employee will accrue too much leave or earn too much super. 

Edit a generated payslip

Generated payslips can be edited, allowing you to change the details of what was paid to an employee. This can include resolving underpayments or overpayments. 

Please refer to the 'Before you start' section above to ensure that a payslip edit is the right choice for you. 

To edit a generated payslip:

  1. Navigate to Payroll > Pay and select Generated payslips.
  2. Locate the payslip you need to edit, optionally using the period end selection, search field, or filters. 
  3. Select the down arrow next to the payslip ID > Edit.
  4. Add the missing pay items or change the incorrect pay items on the payslip. While editing a payslip you can add, remove, or change:
    • The position worked.
    • The rate label, hours worked, rate of pay, and cost code/purchase order.
    • Allowances & pay items.
    • Shift penalties.
    • Entitlements (including cash out and termination), 
    • Deductions. Only deductions that are not paid to another account can be added manually. 
    • Reimbursements.
    • Super Contributions. This includes Super Guarantee, Salary Sacrifice, Employee Personal Super Contribution and Employer Additional Super Contribution amounts.
    • Entitlement accrual values. These will adjust automatically based on changes you make to hours worked. They can also be manually adjusted if required.
    • Tax. You can override tax if you are calculating this yourself for any reason.

        For in-depth information on editing anything on a payslip, please refer to the Generating pay for your employees article. 
  5. Select Preview Payslip to have a look at your changes before saving. 
  6. Once the changes are made, select Update Payslip and enter a reason for your edit. 
    The reason provided here will be present in the payslip version history and will serve as a record of what happened.

  Please note: changes made (added, edited, or removed) to hours worked or leave will remove the breakdown on the second page of the payslip. Changes made to items that do not affect hours (deductions, reimbursements, pay items, etc) will not affect the payslip breakdown. 

SCENARIO

An employee was incorrectly paid 27.5 hours of normal OTE. They should have instead only been paid for 20 hours. In the below example, we will correct this using a payslip edit.

  1. The generated payslip is edited. 
  2. The normal OTE line item is reduced to 20 hours. 
  3. The payslip is saved with a reason for the edit provided. 
  4. We view the payslip history to highlight the changes made. 

After the edits have been made we will need to refer to the section on Managing Payments below. This will detail the next steps based on the changes you made. 

Managing Payment

After the payslip has been updated, there are 3 possible scenarios. Underpayment, overpayment, or correct payment. 

  • Underpayment - If your edit was to resolve an underpayment of an employee, an ABA file for the difference between their original and the updated payslip will be created automatically for you. 
    • If you have already paid the original ABA file, you can process this new one to pay the employee. 
    • If you have not yet paid the original ABA file, you can merge it with the new one. This will create a single ABA file for your processing.
  • Overpayment - If your edit was to resolve an overpayment to the employee, no ABA file will be generated. 
    • If you have already paid the original ABA file, please refer to the 'Managing overpayments' section below. 
    • If you have not yet paid the original ABA file, you can regenerate an ABA for that period. As a negative ABA file is not created (and therefore you have nothing to merge) you can instead create a new ABA file with the correct balance to pay. 
  • Correct payment - If the details that you edited in the payslip made no financial changes to the payslip, no ABA file will be created and there will be nothing to action. 

Regardless of the payment, once the payslip has been updated, the employee will have the updated version available through their Employee App immediately! They will only have access to the most recent version of the payslip. 

Create an adjustment payslip

Generated pays can be altered via an adjustment payslip, allowing you to change the details of what was paid to an employee. This can include resolving underpayments or overpayments. 

Please refer to the 'Before you start' section above to ensure that an adjustment payslip is the right choice for you. 

Please note: Once you finish creating the adjustment, it will sit in Draft Payslips. You will need to generate the adjustment payslip to have an ABA file generated to pay the employee. 

To create an adjustment for an underpayment:

  1. Navigate to Payroll > Pay and select Generated payslips.
  2. Locate the payslip you need to edit, optionally using the period end selection, search field, or filters. 
  3. Select the down arrow next to the payslip ID > Create Adjustment.
  4. To amend anything incorrect, click the Minus symbol to the right of it. This will subtract that entire line item. The Hours and Amounts will be displayed as negative values.
  5. If you need to add worked hours or allowances, click + Add New Position and fill in the Operation, State, Position and Days Worked. Then click, + Add Pay Rate and complete the details for the correct pay information. 
  6. You may also add or edit:
    • Allowances & pay items.
    • Shift penalties.
    • Entitlements (including cash out and termination), You may only add entitlements, not edit or delete. 
    • Deductions. Only deductions that are not paid to another account can be added manually. 
    • Reimbursements.
    • Super Contributions. This includes Super Guarantee, Salary Sacrifice, Employee Personal Super Contribution and Employer Additional Super Contribution amounts.
    • Entitlement accrual values. These will adjust automatically based on changes you make to hours worked. They can also be manually adjusted if required.
    • Tax. You can override tax if you are calculating this yourself for any reason.
  7. Select Preview Payslip to have a look at your adjustment payslip before saving.
  8. Once the changes are made, select Create Adjustment. The adjustment payslip will be created and can be viewed in Draft Payslips. 
  9. Navigate back to Draft Payslips and select the newly created Adjustment payslip and select Generate.

SCENARIO

An employee was incorrectly paid 27.5 hours of normal OTE. They should have instead only been paid for 20 hours. In the below example, we will correct this using an adjustment payslip. 

  1. An adjustment payslip is created.
  2. The normal OTE line item is removed (27.5 hours). 
  3. The same position is added back in with 20 hours of normal OTE. 
  4. The adjustment payslip is saved. 
  5. From draft payslips, the adjustment payslip is then generated which finalises the changes made. 

After the adjustment has been made we will need to refer to the section on Managing Payments below. This will detail the next steps based on the changes you made. 

  An adjustment payslip can be identified by the 'A' in the ID. In the example above, the original payslip has an ID of '3284'. The adjustment payslip has its own unique ID followed by an 'A' and then references the original payslip. In the above example, this is '3629-A 3284'. 

Managing Payment

After the adjustment payslip has been generated, there are 3 possible scenarios. Underpayment, overpayment, or correct payment. 

  • Underpayment - If your adjustment was to resolve an underpayment of an employee, an ABA file for the difference between their original and the adjustment payslip will be created automatically for you. 
    • If you have already paid the original ABA file, you can process this new one to pay the employee. 
    • If you have not yet paid the original ABA file, you can merge it with the new one. This will create a single ABA file for your processing.
  • Overpayment - If your adjustment was to resolve an overpayment to the employee, no ABA file will be generated. 
    • If you have already paid the original ABA file, please refer to the 'Managing overpayments' section below. 
    • If you have not yet paid the original ABA file, you can regenerate an ABA for that period. As a negative ABA file is not created (and therefore you have nothing to merge) you can instead create a new ABA file with the correct balance to pay. 
  • Correct payment - If the details that you edited in the adjustment payslip made no financial changes, no ABA file will be created and there will be nothing to action. 

Regardless of the payment, once the adjustment payslip has been generated, the employee will have the original & adjustment payslip available in their Employee App immediately. 

Managing overpayments

Overpayments are a little more complex to manage than underpayments. The complexity with them comes from how you recoup the overpaid amount and then how that will report in foundU. 

There are 2 methods for managing overpayments.

  • Recoup the money outside of foundU.
  • Deduct the money from the employee. 

To help you decide which method is most appropriate for you, please consider the following information. 

Recoup the money outside of foundU

  • This method is the easiest from a system perspective.
  • After editing the payslip or creating the adjustment, the values that foundU reports will reflect what should have been paid to the employee. 
  • The difficulty of this method comes down to the employee. Requesting that an employee transfer money back to your business can be a difficult conversation to have. Especially for large sums of money. 

Deduct money from the employee

  • This method is the easiest in terms of recouping the money but causes issues with reporting. 
  • After editing the payslip or creating the adjustment, the values that foundU reports will reflect what should have been paid to the employee. When you then deduct money from the employee, you are essentially double-dipping on what you are taking from the employee from a reporting perspective. 
  • A net deduction should be used to recoup the money.
  • A gross deduction cannot be used in lieu of a payslip edit or adjustment. Although it could correctly reduce the monetary values, the values of hours worked (ordinary time, overtime, etc) or leave taken will report incorrectly to STP. 

If you do opt to deduct money from the employee, this will need to be set up to take place. Deductions can be added to employee profiles, allowing you to automate the process. You can read more about setting up deductions here