Adjust a Pay with Incorrect STP Report Settings

Overview

If an employee’s pay has been processed using a pay item, deduction item, or superannuation item that has not been set up with the correct STP Report Settings configuration, and the associated pay run has been submitted through STP, you will need to process an adjustment using a lump sum payment. 

To adjust for the incorrectly categorised item, you will need to process two lump sum pays:

• The first lump sum pay will reverse the original amounts that were processed using the incorrectly configured pay item. This should include the same pay item that was used in the original pay, with negative values to reverse the amount.
• The second lump sum pay is to reprocess the payment, and should use a new pay item that has been configured with the correct STP Report Settings. The amounts in this lump sum pay are reported as positive values. 

Before you Start

You will need to ensure that you use the exact same pay item and Pay Date to reverse the original pay.

You’ll also need to create a new pay, deduction, or superannuation item that has been configured with the correct STP Report Settings. This pay item will be used to reprocess the payment and should be used for the impacted employees moving forward, to ensure that their earnings are correctly reported through STP.

Important: When you create the new item, ensure that you give it a unique name that makes it easily identifiable from the original, incorrectly configured item. 

Reverse the Incorrect Pay

To reverse the pay that has used the incorrectly configured pay, deduction, or superannuation item:

1. Go to Payroll > Process Payroll > Process Payroll > select the Pay Cycle or set the Report Settings criteria > Add Lump Sum Pay.
2. Search for the employee, then complete the fields as required, ensuring that you are using the same pay item that was used when the original pay was processed, then click Add Lump Sum Pay.
3. Set the Pay Date to the same date that the original pay run was processed. Tick the checkbox to select the pay, then click Create Pay Run > select Recalculate Selected > edit the Pay Date > Apply.
   Important: If a different Pay Date is used to the original date, additional negative records will be created in your STP data, which will cause your STP message to fail during validation.
4. Expand the employee pay in the Process Payroll report so that you can see the items that have been added. Add any other items included in the original pay. You will need to ensure that you use the same items that were used originally, as this will allow the amounts that were originally processed to be reversed. 
5. Check that the Units for each item in the employee pay are negative, as this will reverse out what was paid to the employee using the incorrect STP Report Settings. You may need to manually overwrite the tax amount to match what was taxed in the original pay. 
6. The negative values will create a recoverable deduction, which you can add to an existing pay run or create a new pay run that includes the employee. 

You will need to repeat the above process for each employee whose pay needs to be adjusted. We recommend including all negative adjustments in one pay run.

Reprocess the Pay Using a Correctly Configured Item

Once you have reversed the pays for all impacted employees, create a second lump sum pay where you will use the new pay, deduction, or superannuation item that you have created, which is configured with the correct STP Report Settings

1. Go to Payroll > Process Payroll > Process Payroll > select the Pay Cycle or set the Report Settings criteria > Add Lump Sum Pay.
2. Select the employee and complete the fields as required, selecting the new item that you have created with the correct STP Report Settings, then click Add Lump Sum Pay. 
3. Expand the employee pay in the Process Payroll report and add any other required items to the pay. Please ensure that you check the tax amount that calculates and overwrite this manually if needed.
4. Once the amounts are confirmed, select the employee pay and add it to an existing pay or create a new pay run.

Moving Forward

You may like to rename the incorrectly configured item in Config to avoid any confusion between the old and new items that have been created, and ensure that the old item isn’t accidentally assigned to any other users in the future (eg ‘ZZ-Base Hourly - DO NOT USE’).

Please note that the Name field for Allowance pay items will be locked once they have been included in a pay run, so you will be unable to edit the names for these items.

You’ll also need to ensure that you check other areas of the system where the old pay, deduction, or superannuation item may be set, and replace with the newly created item, so that the incorrect item isn’t applied to future pays. This includes:

• rules and rule groups;
• Employee profile (for deductions and superannuation); or,
• on the job (for fixed pay items).