Create Adjustments using a Lump Sum Pay

Overview

If an employee’s pay is incorrect, can’t be adjusted using a timesheet adjustment, and has been submitted through STP, you will need to process any adjustments using a lump sum payment.

Some common scenarios where a lump sum payment can be used for an adjustment are:

• Pay amounts or Pay Items used are incorrect;
• Pays have been processed against the incorrect entity;
• Pays have been processed using the incorrect tax table;
• Pays have been processed incorrectly as an ETP or using an incorrect ETP code.
• Pays have been processed using pay, deduction, or superannuation items with the incorrect STP Report Settings. 
• Pays have been processed against the incorrect Engagement Type (Labour Hire/Personal Services Income vs. Salary and Wages)

Adjust an Incorrect Pay

To create an adjustment for an incorrect pay, you will generally need to process two lump sum pays.

• The first lump sum payment is used to reverse the original amounts and should include the pay data that was incorrect as negative values.
• The second lump sum payment is to reprocess the payment, with the corrected pay data recorded as a positive amount.

For example, if an employee was paid 10 units at $20.00 per unit but should have been paid 5 units at $25.00 per unit:

• the first lump sum payment would reverse the 10 units at $20.00 (ie reverse the incorrect Pay Item and amount);
• the second lump sum payment would include 5 units at $25.00 as this is what should have been paid to the employee and reported through STP.

Reversing and reprocessing pays will not automatically create an invoice adjustment. If the adjustment can be processed in a timesheet, this is best practice.