What Kinds of Adjustments Can I Make?

You can create Payroll adjustments with either a zero net pay result, or with a negative effect on net pay. Adjustments cannot be created to affect net pay in a positive manner.

You can adjust the following:

  • Pay codes

  • Deductions

  • Wages from taxable to excess wages or excess to taxable wages for unemployment insurance in the United States, or employment insurance in Canada

  • Miscellaneous payment information

  • Time and Attendance

  • General Ledger entries, including deleting General Ledger entries

  • Payments made to an employee by a third-party

After the adjustment is created, you must update it to history by closing the payroll cycle using the Payroll close in Update mode. You can wait to update the adjustment to history by running the Payroll close with the next payroll cycle or, as recommended, close the adjustment immediately by running Payroll close in Update mode. Calculating tip credit records (U.S. and CA)

For each adjustment, Payroll creates a unique payment record as a payment type J (Adjustment).

Examples

You can create an adjustment between non-tax deductions when an employee has Nurse union dues withheld, but should have had Tech union dues withheld. In this example, the dollar amounts are the same for both codes.

For this example, enter positive dollars for the Nurse union dues code, and negative dollars for the Tech union dues code. Enter positive hours for the sick pay code, and negative hours for the regular pay code.

You can create adjustments between tax deductions, and wages associated with tax deductions when an employee moves from Minnesota to Illinois, but tax deductions associated with the employee are not changed before Payroll is run. Taxes and associated wages must be "Moved" from Minnesota to Illinois.

For this example, enter positive dollars for the Illinois withholding tax deduction code, and negative dollars for the Minnesota withholding tax deduction code. Enter positive taxable wages for the Illinois withholding tax deduction code, and negative taxable wages for the Minnesota withholding tax deduction code. Then, you enter gross wages for the Illinois withholding tax deduction code, and negative gross wages for the Minnesota withholding tax deduction code.

You can create adjustments to move wages between taxable and excess wages when an employee moves from Minnesota to Illinois but unemployment tax deductions associated with the employee were not changed before Payroll was run. In this case, you must adjust taxable and excess wages for both states.

For this example, enter positive dollars for the Illinois unemployment tax deduction code and negative dollars for the Minnesota unemployment tax deduction code. Enter positive taxable wages in the Illinois withholding tax deduction code. Enter Negative taxable wages for the Minnesota withholding tax deduction code. Positive excess wages are entered for the Illinois withholding tax deduction code, and negative excess wages for the Minnesota withholding tax deduction code. Positive gross wages are entered for the Illinois withholding tax deduction code, and negative gross wages for the Minnesota withholding tax deduction code.

You can create adjustments to move earnings between report entities if an employee moves from Legal Entity #1 to Legal Entity #2, and the employee record was not changed before Payroll was run. Taxes and associated wages must be "moved" from Entity #1 to Entity #2. Adjustments of this type will most likely involve employer and employee taxes and all taxable wages. For this example, enter positive dollars for Tax Entity #2 deduction codes, and negative dollars for Tax Entity #1 deduction codes. Enter positive taxable wages for Tax Entity #2 deduction codes, and negative taxable wages for Tax Entity #1 deduction codes. Positive excess wages are entered for Tax Entity #2 deduction codes and negative excess wages are entered for Tax Entity #1 deduction codes. Positive gross wages are entered for Tax Entity #2 deduction codes, and negative gross wages are entered for Tax Entity #1 deduction codes.

You can create adjustments to record repayment by an employee of a partial overpayment. In this example, the employee reimburses the employer using a personal check for the net amount of the overpayment. Use this adjustment if an employee was paid for 40 hours of regular work, but worked only 35 hours. For this example, enter negative 5 hours for the regular pay code. Supply a workers' compensation state or province if the original payment was associated with a different compensation state or province. Enter negative dollars for tax deductions.

Caution: 
Adjustments do not calculate an end result. What is entered on the adjustment is the result of the adjustment. For this reason, you must be careful when creating adjustments. The only way for Payroll to be out of balance is through the use of adjustments.