Run the RetroPay process to ensure that your payroll run for the current period reflects any backdated payments or deductions. Backdated adjustments can occur when:
An employee receives a pay award that is backdated to a previous pay period.
The payroll department makes a retrospective correction for an error that occurred in a previous pay period
For example, at the start of the current pay period, this employee has a pay award backdated to pay period 1. The employee has not yet received any payments for this award. In the current pay period the employee is entitled to payments that represent the backdated amounts for:
Each of the preceding payroll periods (pay periods 1 to 4)
The current pay period
You run your RetroPay process to ensure that the employee receives correct payment when you next run the payroll.
When backdated payments occur, the accuracy of your subsequent payroll processing depends on distinguishing between:
The period in which the payment was earned
The period in which the payment was made
For example, the taxation implications are different for:
A pay award backdated to period 1 and not paid until the current period. You may want to tax this award in the current period.
A correction to an underpayment in period 3 which is paid to the employee in the current period. You may want to tax this correction in period 3 rather than in the current period.
You never overwrite historical payroll data when you run RetroPay. Although you recalculate all periods that have retroactive changes whenever you run a RetroPay, you never modify the stored results for these periods. Instead, you create one or more RetroPay entries to receive the process results.
Think of the RetroPay process as a calculator holding results in memory so that it can process a final set of results. The RetroPay process uses your historical results to calculate the changes for the current period. The results for your current period change, but your historical records remain unchanged.
The RetroPay process recalculates payroll runs, balance adjustments and reversals from a particular date onwards, the start date of the recalculations. When you have retroactive changes overlapping another retroactive change, the application resets the start date to the earliest start date of the RetroPay processes and recalculates.
For example, you perform a RetroPay (RetroPay 1)for an assignment in period 3, with Payroll Runs being recalculated from a start date of period 1. In period 5, you perform another RetroPay (RetroPay 2) for the assignment with a start date of Period 3. The second RetroPay detects an overlap of RetroPays and sets the start date to the earliest start date.
In this case, the application sets the start date as Period 1. An overlapping override occurs to ensure that the balances are correct for the RetroPay process.
The processing of overlapping RetroPay results in an overall increase in time to process the RetroPay. If there are multiple overlaps, the increase in time is excessive.
