If an employee’s profile was set up incorrectly at the time their pay was processed, it might automatically rectify in the employee's next pay, or you may choose to manually edit their next pay. However, this may require a once-off adjustment to correct it, which would be done in a Lump Sum Pay.
To adjust for the incorrectly processed item, you can use a single lump sum pay to reverse the original pay item or add something that was supposed to be included originally.
Note: Please check whether the adjustment/backpay can be processed using an Adjustment Timesheet or the Impact Report - Rate Change before using a Lump Sum Pay. If you're using a Lump Sum Pay to process a termination pay, please refer to this article instead.
Some common reasons for needing to process this type of adjustment are:
- The employee was over or under-taxed
- The employee didn't have an SGC item set up in their profile
- The SGC item in their profile was set at the incorrect percentage
- An incorrect pay or deduction item was used
Before you Start
Ensure you have the correct pay/super/deduction item configured in Config > Payroll. If it's a superannuation or deduction item, make sure it's set up in the employee's profile in Users > Employees > select the employee > Pay Item.
- If you're making changes for a previous tax year that has been locked, go to Config > Payroll > Tax Years > untick the checkbox next to the locked tax year > Save.
- If you're making changes for data that has been submitted in an STP Finalisation, go to Payroll > Process Payroll > STP Update > filter on the relevant financial year > tick the checkbox next to the employee's name > With Selected ... Revert Finalisation > Go
Process the Lump Sum Pay
Create the Lump Sum Pay:
- Go to Payroll > Process Payroll > Process Payroll > select the Pay Cycle or set the Report Settings criteria > Add Lump Sum Pay.
- Search for the employee name, ensuring you tick the 'Inactive Users' or 'Locked Users' checkboxes if required.
- Select your options from each dropdown (see table below) > Save. If you need to include multiple items in the Lump Sum Pay, you'll be able to repeat these steps once you have saved the first one.
|Lump Sum Pay field||Summary/Options|
|ETP Code||Only applicable if you're processing an Employment Termination Pay.|
Pay Item - for adjusting pay items. Choose from items in Config > Payroll > Pay Items
Expense Reimbursement - used to process/adjust an Expense. Please consider using the correct Expense process.
Leave - for adjusting leave. Selection is based on the assigned leave types in the employee's profile.
Deduction - for adjusting deductions. Selection is based on assigned deduction types in the employee's profile. Note - you can not process an adjustment for a deduction on its own.
Contribution - for adjusting contributions. Selection is based on assigned contribution types in the employee's profile.
Withheld Tax - for adjusting PAYG that has been over or underpaid.
Superannuation - for adjusting superannuation items. Selection is based on items set up in Config > Payroll > Superannuation.
If you're adjusting a Pay Item, Expense Reimbursement, or Leave type, you need to select from a list of the employee's Active/Inactive jobs.
Please ensure you choose the right job based on the pay period dates you're adjusting for.
Choose the Pay Item you need to adjust.
Note: This field name will change based on the Item Type you've selected previously (eg. if you choose Superannuation as the Item type, this field will be labelled 'Super items')
If you're adjusting a Pay Item or a Leave type, you need to choose a rate from the dropdown list or enter your own custom rate.
Enter the number of Units you're adjusting, this can be a positive or negative number.
For Expenses, Deductions, Contributions, Withheld Tax, or Superannuation, enter the amount you're adjusting. This can be a positive or negative value.
|Period and Spread (Units)||
For Pay Item or Leave adjustments, choose whether the adjustment is for a Single Day or Multiple Days.
If Multiple Days is chosen, choose whether it is for the 'Days worked in period' or 'Spread over work week (Mon-Fri)'.
|Start and End Date||
Choose the Start Date and End Date that your adjustment relates to.
If you have chosen 'Single Day' in the Period field, you can only choose a Start Date.
|Payroll Note and Pay Advice Note||
Enter a note for your own internal records (admins only) or one that the employee will see on their Pay Advice.
Process the Lump Sum Pay:
- Confirm the Pay Item, Units, Pay Rate, and Amount are appearing as expected in the Process Payroll screen.
- Important: Be mindful of reversing items that would normally be withheld or deducted. For example, negative values against items such as deductions and PAYG will create an amount owed to the employee. Please check the net wages.
- 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 by clicking +Add Pay Record.
- If you're processing an adjustment that results in the employee owing you (ie net negative wages), the system will automatically generate a 'Recoverable Deduction' to offset this. DO NOT DELETE this line if you see it, it's required for you to be able to create the pay run.
- If you need to, tick the checkbox to select the pay, then click Create Pay Run > select Recalculate Selected > edit the Pay Date > Apply. This is particularly important for Super/PAYG adjustments.
- If tax/super/deduction amounts have automatically generated, you can manually edit these values if required, or remove these lines if they are not required for this adjustment by clicking the 'x' to the left of that line.
- Add the pay/s to a Pay Run and lock it/mark as paid as per the normal process.
Some Example Screenshots
Superannuation Adjustment (prior calendar month):
PAYG Adjustment (employee overtaxed):