If you over-or underpaid benefits and/or employer taxes for an employee, and it is too late to void that employee’s payroll, you can create a new payroll run using the same pay period to correct the mistake and adjust the liability owed to the vendor. Because adjustments to benefits/employer taxes do not affect the employee’s net pay, you can enter positive or negative amounts to adjust for a mistake in a previous payroll run.
A positive amount would be added to a benefit/employer taxes item when the employee received too few benefits than initially recorded. For example, if the district covers the employee’s health insurance, but premiums were raised, then the district should owe additional money to the health insurance vendor. A positive amount will increase the liability.
A negative amount would be added to a benefit/employer taxes item when the employee received too much in benefits/employer taxes. For example, if the employer FICA payroll item had accidentally been added twice, the new payroll run would use a negative amount to decrease the liability.
Since the position has already been paid in another payroll run, payroll items are not automatically added when the position is checked in the new payroll run. You will need to add only the items that need adjustment and enter the adjusting values.
Before you create the new payroll run, you should figure out the amount of employer taxes and benefits each employee’s position needs added or subtracted to reach the expected value. For example, if you mistakenly entered $60 for health insurance in a previous run but should have entered $50, in the new payroll run you should enter -$10.
To create a payroll run to add or subtract benefits/employer taxes:
- Go to Financials Main > Payroll > Payroll Runs
- Create
- Choose the Check Date
- Check the box next to Adjustment (This will allow you to add positions that were already paid to this run)
- Check which Pay Periods To Add (the same pay period that was already used)
- Save
- Register
- In the Employees tab select only the positions of the employees that need to be adjusted. Disregard the error message “Employee on another payroll run for...”
- To add or subtract Benefits and or Employer taxes
- Click on the applicable tab
- Click the down arrow and select Add Payroll Item.
- Open the drop-down list next to Payroll Item
- Select the correct payroll item
- Save
- Type the positive or negative amount needed into the correct payroll item column
- Confirm everything is correct in the Summary tab
- Mark the payroll Approved
- Create Payroll Journal Entries
- Continue (disregard the message that says “The following employee positions lack a wage item”)
- Pay Paychecks and Liabilities (see handling liabilities))
- Mark payroll run Complete