You can create pay adjustments in the Adjustments sub-tab of Payroll > Pay Run Management for employees in the pay run that you have loaded.
The Adjustments sub-tab of the Pay Run Management tab has the same basic functionality as the Adjustments sub-tab of the Data Entry tab, except in Data Entry, you can only work on multiple pay runs and pay groups. See The Adjustments Sub-tab (Data Entry).
In some cases, an employee can receive a payment (or have a deduction taken from their wages) that was categorized incorrectly. In situations like this, the year-to-date (YTD) amounts for employee earnings, taxes, or deductions and, consequently, the YTD amounts for the organization can be out of balance.
To ensure that the amounts balance, you can create a pay adjustment. A pay adjustment allows you to correct the YTD amounts, typically by recording two adjustments: one to subtract the amount applied to incorrect earning or deduction, and another to add the amount to the correct earning or deduction.
For example, a bonus payment might have been entered using a commissions earning. Say the employee's records had a $500 in bonus payment that should have been entered as commission. You could enter an adjustment of -$500 bonus and +$500 commission to correct the employee's YTD amounts.
In this example, while an amount is entered into the application, no money is paid to employees or deducted from employee earnings.
Another example of an adjustment is entering an adjustment for third-party sick pay. Some organizations have contracted with providers to pay their employees' sick pay; when an employee is off sick, they are paid by the provider instead of their employer. These payments are referred to as third party sick pay and need to be recorded in Dayforce as adjustments so that taxes are calculated, remitted, and reported properly.
Entering an adjustment ensures that the year-to-date amount is correct and, if your organization is using a general ledger for accounting, that the amounts in the credit and debit accounts are balanced for the earning, deduction, or tax being adjusted.
Note the following about adjustments:
- The amount that is entered in Dayforce is applied to the YTD amount for the current pay period and onward. Pay adjustments do not impact the details of already committed pay.
- You can adjust amounts for any committed pay period in the current year. Adjustments can apply to earnings, deductions, or taxes and can be either a positive or a negative value.
- While you can create an adjustment in the Adjustments sub-tab, you can also enter adjustments in the Quick Entry and Checks sub-tabs of Payroll > Pay Run Management.
If there is any chance that employee taxes might be impacted by a correction, it is strongly advised that you use quick entries or checks to ensure that Dayforce automatically performs the necessary calculations to account for changes to taxation. The Adjustments sub-tab should generally be used if there is no chance that employee taxes might be impacted by the adjustment, or if the adjustment is for employer taxes, which do not impact employee taxes.