Settle a remaining net payment difference after the payroll records are correct.
When to use this method
Use this method when correct payroll leaves an amount to pay or recover, including after a correction. Do not record the gross earnings again to move money.
Choose a suitable settlement method
Agree the settlement method with the employee, including any required agreement to recover an overpayment through a deduction.
Check the applicable requirements for the chosen method and the calculation and tax treatment of any code used.
1. Calculate the remaining net difference
Compare the correct net amount due with money already received by the employee, less any amount returned. Calculate the remaining shortfall or excess for each employee after any settlement or next-pay adjustment already made.
2. Choose one settlement method
If the employee was underpaid
Manually pay the employee the remaining net shortfall and retain the payment reference.
Alternatively, add a non-taxable reimbursement for the remaining net shortfall in the next normal pay. Select the employee in the Payrun screen, then add the reimbursement in the Allowances tab using a suitable non-taxable reimbursement allowance code. Enter the units and rate required by that code so its Value equals the net shortfall.
If a suitable reimbursement code is not available, create one with the appropriate non-taxable classification for your country using Creating Allowance codes. For the entry controls, refer to Allowances tab.
If the employee was overpaid
Arrange for the employee to repay the remaining net excess and retain the repayment reference.
Alternatively, with the required employee agreement, enter a sundry deduction for the remaining net excess in the next normal pay. Select the employee in the Payrun screen, open the Sundry deduct tab and click +. Confirm that the Sundry deduction code is suitable for the agreed net recovery and check its calculation method. Select that code and enter the inputs it requires. Verify that Value equals the agreed recovery.
For the deduction code selection and entry controls, refer to Sundry deduct tab. Use one settlement option for each amount; do not also pay, recover or adjust the same difference another way.
3. Complete and confirm the settlement
For a reimbursement or deduction in the next normal pay, add a clear payslip note and complete The pay process. Check that the reimbursement increases, or the deduction reduces, the employee’s net payment by the intended amount.
Record the settlement reference and confirm that no net difference remains. Do not resubmit a full payroll bank file where staff have already been paid.
For payment controls, refer to: