Skip to main content
Documentation
Documentation
Administrator Guide
Last Updated: 2026-03-13
Setup Considerations: Payroll

Setup Considerations: Payroll

You can use this topic to make decisions when planning your configuration and use of Workday Payroll. It explains:
  • Why to set it up.
  • How it fits into the rest of Workday.
  • Downstream impacts and cross-product interactions.
  • Security requirements and business process configurations.
  • Questions and limitations to consider before implementation.
Refer to detailed task instructions for full configuration details.

What It Is

Workday Payroll provides a comprehensive platform that enables you to manage your entire payroll process, including:
  • Gathering and entering required payroll inputs. Examples: Benefits, earnings, and deductions from third-party systems.
  • Integrating with third-party providers.
  • Calculating gross pay, taxes, and deductions.
  • Conducting audits before and after payroll processing.
  • Generating accounting entries for payroll transactions.
  • Paying employees.
  • Providing payslips both online or on mobile devices.
  • Providing reports and tools to assist you in your reporting requirements.
You can use Workday to manage payroll for:
  • Australia
  • Canada
  • France
  • Ireland
  • United Kingdom
  • United States

Business Benefits

Workday Payroll provides several business processes and configurable dashboards that enable you to coordinate payroll tasks between multiple role-based users, which:
  • Reduce time-consuming manual processes.
  • Ensure accountability among different payroll and HR partners.
When you use other Workday products like Absence Management, Time Tracking, and Finance on the same platform as Payroll, you can exchange and report on real-time data. This enables you to manage your workforce based on accurate labor cost data.
Workday also provides:
  • Tax and compliance updates, enabling you to easily follow and adapt to regulatory changes.
  • Configurable audits that ensure accurate payroll results.
  • Employee self-service functionality to enable employees to view their data and take action. Example: Modify payment elections.
You can use configurable security policies to limit who views specific payroll data.

Use Cases

You can use Workday Payroll for:
  • Regular, on-cycle, payroll.
  • Off-cycle payments and adjustments outside of the standard payroll.
  • Court orders.
  • Garnishments.
  • Gross-up earnings.
  • International assignments.
  • Mergers and acquisitions.
  • Payments for terminated workers and workers on leave of absence.
  • Retroactive payroll.
  • Single legal entity company relationships.
  • Taxation for a mobile workforce.
  • Workers with multiple positions.

Questions to Consider

Review additional detailed setup considerations for each specific configuration area.
Question
Considerations
Who do you need to pay and when?
You can configure:
  • Pay groups to identify a group of workers to process in a payroll run.
  • Period schedules to determine the payment frequency. Multiple pay groups can use the same period schedule as long as they have the same payment frequency.
  • Run categories to identify what to pay for each worker and payment type.
To manage a larger group of workers, you can create a pay run group. This enables you to process and report on multiple pay groups and run categories together.
What kind of payments do you want to process?
You can use on-cycle payroll processing to make regular payments for predefined periods.
You can use different types of off-cycle payments to process payments to workers outside of their regular payroll schedule. Examples:
  • On-demand payments to adjust or replace a worker's standard on-cycle pay.
  • Manual payments to record a payment made outside of Workday.
  • Reversals to record a negative version of a completed payment that you haven't reconciled with a bank statement.
    Workday Payrolls for France and Ireland don't support reversals.
What do you need to calculate for your workers' pay?
You can configure pay components to:
  • Use calculations specific to the needs of your company.
  • Retrieve values from other parts of Workday, such as compensation or benefits.
  • Automatically calculate appropriate taxes.
Who completes different payroll processing tasks, and in what order?
You can configure the
Pay Cycle Event
 business process to:
  • Specify the sequence of payroll processing tasks in your organization.
  • The roles responsible for their completion.
Which historical payroll data do you need from external systems?
To ensure accurate payroll calculations, you can load historical payroll data from external systems. This enables you to:
  • Include payroll history in quarter-to-date and year-to-date calculations.
  • Apply limits and self-correcting logic to correct amounts when you start using Workday Payroll.
You can add or correct payroll history at any time. However adding or changing historical results for a worker can impact calculations and results that use historical balances.
How do you want to allocate employee earnings and employer-paid expenses?
You can configure Workday Payroll to assign costs to cost centers, locations, or other organization types to help you monitor and manage costs.
How do you pay employees?
You can define a payment type for each method of payment, such as:
  • Cash.
  • Check.
  • Direct deposit.
You can use payment election rules to define the payment methods for different:
  • Types of workers.
  • Types of payments, such as bonuses or regular payroll
When workers enter their bank account information, they can select their preferred payment method from the options you define.
For Payroll for the U.S., you can configure a tenanted pay card payment type and map it to an existing payment type. Examples: You can map a pay card payment type to:
  • Direct deposit for on-cycle payments.
  • Manual for off-cycle payments that occur one time only.
Which bank accounts are you using for payroll?
You can designate which accounts to use for payroll payments when configuring the:
  • Bank account.
  • Bank routing rules.
Example: You can configure Workday to use a specific bank account for all bonus payments.
How do you want to provide payslips?
You can provide employees with payslips through:
  • Employee self-service (ESS): Employees can view payslips online or on mobile devices, as well as print their payslips.
  • Check and advice printing: You can provide paper versions of payslips.
Do you have employees who work in multiple locations?
Workday maintains tax data for all tax authorities, so you can rely on compliance being up to date.
You can use the
Payroll Compliance Updates
 dashboard to identify whether a compliance update potentially impacts your employees and take appropriate action.
For Payroll for the U.S., Workday also offers multijurisdiction tax allocations, which give you the ability to configure taxes for a mobile workforce and reduce manual entries of tax jurisdictions.
Do you have employees who travel internationally for work?
When a worker from another country is on international assignment in the U.S. or Canada, you can pay them in their host country for either:
  • Their entire pay.
  • Only selected expenses, such as housing allowance. You continue to pay their base pay in their home country using third-party payroll.
How do you manage tax elections?
Workday provides both administrator and employee self-service tasks for adding and updating tax elections.
You can also enable pre-employees to complete tax elections before starting work.
You can configure Workday to route the tax election business process for approval.
How do you manage withholding orders and involuntary deductions for the U.S.?
Workday provides rules for calculating and processing income withholding orders that are in compliance with the relevant tax authorities. When configured, Workday calculates fee and payment amounts when processing payroll. You can override the tax authority rules for certain types of withholding orders.
How do you manage withholding orders for Australia?
Workday provides rules for calculating and processing income withholding orders that are in compliance with the relevant authorities. When configured, Workday calculates payment amounts when processing payroll.
How do you manage withholding orders for France?
Workday provides rules for calculating and processing income withholding orders that are in compliance with the relevant tax authorities. When configured, Workday calculates fee and payment amounts when processing payroll.
How do you manage garnishments for Canada?
Workday provides rules for calculating and processing garnishments that are in compliance with the relevant tax authorities. When configured, Workday calculates fee and payment amounts when processing payroll.
How do you manage court orders for the UK?
Workday provides rules for calculating and processing court orders that are in compliance with the relevant tax authorities. When configured, Workday calculates fee and payment amounts when processing payroll.
What information do you need to provide from external sources?
You can add payroll input to adjust or provide information from external sources. Examples:
  • Bonus or incentive amounts.
  • Deductions from third-party providers.
  • Loan repayment information.
  • Third-party time reporting systems.
  • Time or absence information.
  • Pay rates.
How do you want to manage retroactive payroll changes?
Depending on the country, you can configure and use retroactive payroll processing to manage these types of supported events:
  • Benefit changes, including changes to rates and deductions.
  • Compensation changes.
  • Hires.
  • Leaves of absence.
  • Other data changes.
  • Payroll input.
  • Terminations.
  • Time entry.
  • Time off.
Workday doesn't support all retroactive changes for all countries. You can view the supported changes by country on the
All Supported Payroll Retro Transaction Types
 report.
When you process a retroactive change, Workday recalculates the payroll results for the specified prior periods and transfers any differences to the current payroll period.
What regulatory payroll reporting requirements do you have?
You can configure Workday to help you manage:
  • Quarterly and year-end tax reporting for Payroll for the U.S.
  • Year-end tax and Record of Employment (ROE) reporting for Payroll for Canada.
  • Real Time Information (RTI) and P60 reporting for Payroll for the UK.
  • Déclaration Sociale Nominative (DSN) reporting for Payroll for France.
  • Single Touch Payroll (STP) reporting for Payroll for Australia.
How do you want to analyze payroll results?
Workday calculates a payroll result for a worker for a given period and run category.
To define additional dimensions, you can use custom or standard worktags that help you analyze and calculate payroll results.
You can define worktags to:
  • Track transactions. Example: Track loan repayments.
  • Filter pay accumulations or balances for a specific dimension. Example: View an accumulation for one specific type of loan.
For which time periods do you want to view aggregated results?
You can configure payroll balances to calculate aggregated values for a combination of pay components, pay component groups, and pay accumulations for a given period of time. For each payroll balance, you can specify the period of time over which to aggregate the results.
What do you want to audit payroll results for?
You can configure payroll audits before closing your pay period to:
  • Identify possible issues.
  • Reconcile payroll.
You can configure audits that:
  • Analyze payroll results for workers within a single period.
  • Compare payroll results for workers between multiple periods.
You can also limit the worker population to audit only specific workers. Example: Workers in a specific cost center or region.
Do you need to comply with the U.S. Fair Labor Standards Act (FLSA)?
You can configure Workday to help you comply with the Fair Labor Standards Act (FLSA) to pay employees at the required rate for overtime hours. Workday supports overtime calculation for these work period durations:
  • 7-day, for a standard workweek.
  • 14-day, for healthcare workers on a 14-day workweek.
  • 7- to 28-day, for public safety workers whose workweeks can vary from 7 to 28 days.
Workday FLSA payroll processing enables:
  • FLSA work periods that cross pay periods.
  • Look-back processing of FLSA eligible bonuses.
  • Manual and on-demand payroll results to accumulate by FLSA work period.
Do you want to validate a minimum net pay amount?
You can define a static minimum net pay amount for each run category. By default the value is zero. You can configure Workday to track arrears when a worker doesn't have enough pay to both:
  • Cover all deductions.
  • Meet the minimum net pay.
You can then define different priorities and rules determining how and when to recoup arrears.

Recommendations

For optimal performance, when configuring what to process in payroll, use eligibility criteria to process only what is necessary. Examples: Configure eligibility criteria to have Workday only process the pay components that apply to workers in the run.
Consider performance impacts when creating pay components and pay component related calculations. A larger number of pay components and related calculations result in longer payroll calculations.
Use the
Tenant Analyzer
 report to verify your tenant configuration against Workday recommendations.

Requirements

Configure company and worker data in HCM.
For certain payroll calculations, you must provide data from within Workday or external integrations for these areas:
  • Absence
  • Benefits
  • Compensation
  • Time Tracking
Regardless of whether you use Financial Management in Workday, you must create and regularly maintain accounting configurations related to payroll transactions, including:
  • Account sets and account posting rules.
  • Fiscal schedules, posting intervals, and years.
  • Journal source mapping.
  • Types, account types, periods, and years for ledgers.

Limitations

  • Workday doesn't report tax information directly to government organizations for Payroll for the U.S. or Payroll for Canada.
  • While you can use Workday to help you meet payroll compliance, you must verify that your payroll is compliant with requirements for the regions in which you operate.

Tenant Setup

You can use the
Edit Tenant Setup - Payroll
 task to enable different countries for Workday Payroll, as well as configure tenant-wide options for:
  • Configuration and electronic signature text for year-end tax documents.
  • Costing allocations.
  • Disabling the payroll result profile.
  • Displaying national IDs on withholding elections.
  • Electronic signature text for year-end tax documents.
  • Enabling continuous payroll calculations.
  • ID sequence generators and partial fees for U.S. withholding orders.
  • Payroll accounting.
  • Payroll commitments.
  • Payslip viewing, printing, and self-service layout (for report design layouts).
  • Retroactive processing.
  • W-2/W-2C form alignments for the U.S.
You can use the
Edit Tenant Setup - Global
 task to enable self service payment elections for specific countries.
You can use the
Edit Tenant Setup - HCM
 task to enable multiple jobs.

Security

You can use:
  • Constrained, role-based security groups to provide payroll partners access only to the specific pay groups to which they’re assigned.
  • User-based security groups to provide payroll administrators with access to all pay groups across organizations. Consider also using user-based security groups for calculation and settlement administrators to provide them with a system-wide access without enabling them to see employee-level payroll data.
  • Segment-based security groups to provide payroll administrators access to calculations only within their area and institution. You can also use segment-based security groups to restrict access to specific country options on certain tasks.
To view the different security domains for payroll, access the
Domain Security Policies for Functional Area
 report and select a Payroll functional area. Workday recommends that you identify and grant the minimum level of security that a worker needs.
Functional Areas
Considerations
Core Payroll
Security domains in this functional area enable users to configure and use basic Payroll features that are common to all countries, such as:
  • Accumulations.
  • Balances.
  • Deductions.
  • Earnings.
  • Payment elections.
  • Payroll input.
  • Payroll processes.
  • Settlement.
AUS Payroll
Security domains in this functional area enable users to configure and use features specific to Australian Payroll, such as:
  • Single Touch Payroll (STP) reporting.
  • SuperStream.
  • Leave payments.
  • Termination payments.
  • Company tax data.
  • Withholding orders.
  • Worker tax and superannuation data.
CAN Payroll
Security domains in this functional area enable users to configure and use features specific to Canadian Payroll, such as:
  • Record of employment (ROE) reporting.
  • Tax authorities.
  • Withholding orders.
  • Worker tax data.
  • Year-end forms.
FRA Payroll
Security domains in this functional area enable users to configure and use features specific to French Payroll, such as:
  • Advances.
  • Company tax data.
  • Declaration Sociale Nominative reporting.
  • Employee and Employer deduction data.
  • Loans.
  • Withholding orders.
  • Worker tax data.
IRL Payroll
Security domains in this functional area enable users to configure and use features specific to Irish Payroll, such as:
  • Company tax data.
  • Employer tax reporting.
  • Pension auto-enrolment.
  • Worker tax data (LPT, PAYE, USC).
UK Payroll
Security domains in this functional area enable users to configure and use features specific to UK Payroll, such as:
  • Company holiday pay.
  • Company tax data.
  • Court order deductions.
  • Employer tax reporting (RTI, P45, P60)
  • National insurance.
  • Pension auto-enrolment.
  • Postgraduate loans.
  • Statutory payments associated with birth, adoption, bereavement, or sickness.
  • Student loans.
  • Worker tax data.
USA Payroll
Security domains in this functional area enable users to configure and use features like these:
  • Company tax data.
  • Withholding orders.
  • Worker tax data.
  • W-2, W-2R, W-2GU, and W-2VI boxes and employee forms.
  • Payroll commitments.
And are specific to Payroll for:
  • The U.S.
  • Puerto Rico
  • Guam
  • Virgin Islands
To enable nonpayroll administrators to report on payroll data, you can create pay component security segments that control the visibility of earning and deduction results in custom reports. You can add the nonpayroll administrators to segment-based security groups that have access to the defined segments.

Business Processes

Area
Business Processes
Considerations
Onboarding
  • Assign Pay Group
  • Complete Federal Withholding Elections
  • Complete State and Local Withholding Elections
  • Hire
  • Payment Election Enrollment Event
You can add
Assign Pay Group
 as a subprocess of the
Hire
 business process, which ensures that you assign a pay group to all new hires.
You can configure the
Payment Election Enrollment Event
 business process to enable new hires to enter bank account details and select payment preferences.
Payroll accounting
  • Assign a Costing Allocation
  • Create Payroll Accounting Adjustments
These business processes enable you to:
  • Make adjustments to payroll accounting entries.
  • Assign default costing allocations for workers.
Payroll processing
Pay Cycle Event
Configure this business process to specify:
  • The sequence of payroll processing tasks in your organization.
  • The roles responsible for their completion.
Termination
  • End Payroll Inputs
  • On Demand Event
  • Termination
You can add several steps or reminders to the
Termination
 business process to ensure that a terminated worker is no longer processed. Example: Deactivate worker payment elections.
You can also use the
End Payroll Inputs
 business process to enable other Workday users to end workers' ongoing payroll inputs as part of a termination.
For Payroll for the U.S., you can use the
On Demand Event
business process to enable HR administrators to pay workers on the day of termination.
Settlement
  • Payment Printing Event
  • Payment Release Event
    /
    Outsource Payment Release Event
  • Print Checks Task
  • Settlement Run Event
Configure these business processes to:
  • Generate positive pay files corresponding to printed checks.
  • Trigger the payment for electronic payment methods.
  • Print hard-copy payslips and checks.
  • Settle payroll payments.
Year-end reporting
  • RL-1 Year End Process
     (Payroll for Canada)
  • T4 Year End Process
     (Payroll for Canada)
  • W-2 Year End Process
     (Payroll for the U.S.)
You can configure these business processes to help you complete the series of steps required for year-end reporting. You can specify the sequence and types of year-end tasks, as well as the roles responsible for their completion.
Withholding elections
For Payroll for Canada:
  • Complete Federal Withholding Elections
  • Complete Province Withholding Elections
  • Complete Federal Commissions and Expenses Withholding Elections
  • Complete Quebec Commissions and Expenses Withholding Elections
For Payroll for the U.S.:
  • Complete Federal Withholding Elections
  • Complete State and Local Withholding Elections for a Worker
  • Copy Tax Elections for Worker
  • Copy Tax Elections for Workers
For Payroll for Canada, you can configure these business processes to:
  • Enter a worker's federal, provincial, or Commissions and Expenses withholding elections after a job change or during onboarding.
For Payroll for the U.S., you can configure these business processes to:
  • Enter a worker's federal, state, or local withholding elections after a job change or during onboarding.
  • Copy worker tax elections for workers transferring between companies.
Withholding orders
  • Copy Withholding Orders for Worker
  • Copy Withholding Orders for Workers
For Payroll for the U.S., you can configure these business processes to enable you to copy withholding orders for an employee when:
  • The employee transfers between companies.
  • You create new company relationships.

Reporting

To view the available reports for Workday Payroll, access the
Workday Standard Reports
 report, and select one of these report categories:
Report Categories
Considerations
Payroll Processing/Results
Use reports in this category to report on payroll results for individuals or groups of workers.
Payroll Worker Data
Use reports in this category to audit and report on individual worker data such as payment elections or tax elections.
Set Up Payroll
Use reports in this category to verify and see a summarized view of your payroll configuration.
You can also use the
Pay Cycle Command Center
 dashboard to help you review and manage payroll data for a single or multiple pay periods at a time.

Integrations

Workday provides multiple web services and integrations for common payroll inputs and configurations. Consider these fundamental web services and integrations when configuring Workday Payroll.
Web Service
Considerations
Assign Costing Allocation
Use to assign costing allocations to workers by batch.
Change No Retro Processing Prior To
Use to change the no retro processing prior to (NRPPT) date for multiple workers.
Import Payroll Input
Use to load payroll input by batch.
Import Payroll Off-Cycle Payment
Use to load off-cycle payments by batch. Workday loads these payments as unprocessed. Run the
Run Off-cycle Pay Calculation
 task to process batches of off-cycle payments after loading the payments.
Put Payroll History Payment
Use to load historical payroll payments by batch.
Put Period Schedule
Use to load periods for a period schedule by batch.
You can also use each of these web services to create an Enterprise Interface Builder (EIB).
Integration
Considerations
ADP Check Print (Enhanced Performance)
For Payroll for the U.S, you can use this integration to outsource to ADP:
  • Full Service Direct Deposits (FSDD).
  • Printing of payroll checks, advice slips, and mail label files.
Annual Tax Filing - CRA (T4)
Annual Tax Filing - CRA (T4A)
Annual Tax Filing - RQA (RL -1)
Annual Tax Filing - RQA (RL -2)
For Payroll for Canada, use to generate year-end tax forms for Canadian workers.
BLS Electronic Data Reporting - MWR
For Payroll for the U.S.
Use to generate a Multiple Worksite Report for submission to the United States Department of Labor, Bureau of Labor Statistics (BLS).
Core Connector: Payroll Check Printing (Enhanced Performance)
Use to send checking data to banks that don't support existing checking integrations.
DSN Deposit (Machine to Machine)
DSN Polling (Machine to Machine)
For Payroll for France, use to submit and retrieve information around Déclaration Sociale Nominative submissions from net-entreprises.fr.
Electronic Income Withholding Order Inbound
Electronic Income Withholding Order Outbound
For Payroll for the U.S, use to exchange data with the Federal Office of Child Support Enforcement (OCSE) web portal.
HMRC Incoming Notifications
HMRC Real Time Information - Employer Payment Summary
HMRC Real Time Information
For Payroll for the UK, use to exchange data with the HM Revenue & Customs (HMRC), including:
  • Retrieving tax code, student loan, and postgraduate loan notices from the Data Provisioning Service (DPS).
  • Sending Employer Payment Summary (EPS) files using the Real Time Information (RTI) online service.
  • Sending Full Payment Submission (FPS) files using the RTI online service.
Service Canada ROE Outbound
Service Canada ROE Inbound
For Payroll for Canada, use to generate and retrieve Record or Employment (ROE) files from a computer accessible to the integration system. This integration doesn't support direct connection to Service Canada.
Single Touch Payroll (Australia)
For Payroll for Australia, use to send Single Touch Payroll (STP) reports to the Australian Taxation Office (ATO).
SuperStream (Australia)
For Payroll for Australia, use to send superannuation funds and data to workers' superannuation funds.
Worker Payroll Input Async
Use to import files with worker payroll data from an external server into Workday. Example: Time off values.
Worker Time Off Inbound
Use to import time card data for your workers into Workday.
WPN - Ceridian Check Printing
Use to outsource printing of payroll checks, advice slips, or banking services to Ceridian.
Workday also supports integrations with several electronic payment service providers and protocols, including:
  • Automated Clearing House (ACH).
  • Bankers' Automated Clearing Services (BACS).
  • Australian Banking Association (ABA).

Connections and Touchpoints

Touchpoint
Consideration
Absence
When you configure time off plans to track balances in Absence Management, you can retrieve the units for approved time off as part of earning and deduction calculations. Use absence component-related calculations (ACRCs) to associate absence plans to earnings and deductions. Ensure that you map all absence plans with an impact on payroll to an earning or deduction.
When you configure leaves of absence, you can select whether to pay workers their normal salary while on leave. For workers on a leave type that impacts payroll, Workday only pays a worker:
  • The earnings and deductions that you specify for workers on leave on the run category.
  • One-time payroll inputs.
Banking
To make accurate payroll payments, you need to configure:
  • Bank accounts with specific payroll usage types.
  • Bank routing rules.
You can also configure check print layouts to manage paychecks and advices.
Benefit Plans
You can associate benefit plans to earnings and deductions, enabling Workday to process contributions and payments through payroll.
Compensation
You can map compensation elements to earnings, to retrieve details from compensation packages, and use them in payroll calculations.
Ensure that you consider the frequency of your payroll payments when configuring frequencies in Compensation. If you have part-time workers, consider configuring the
Use Weekly Hours
 option.
Financial Management
Regardless of whether you use Financial Management, you must configure and regularly maintain accounting configurations related to payroll transactions.
When you use Financial Management in addition to Workday Payroll, you can also track start and end dates through Grant Management.
HCM
Provide employee and job-related data for payroll processing, such as:
  • Employee status.
  • Personal information.
Mobile
When you enable employee self-service, workers can view payslips on mobile devices.
Time Tracking
You can associate time calculation tags with earnings or deductions, enabling you to use approved time blocks as inputs when paying workers.
You can also retrieve worktags such as projects and override rates directly from the calculated time blocks for costing purposes.
When you use payroll in combination with Time Tracking, Workday recommends that you run payroll during the period schedule lock dates.
Working Time
For Payroll for France, to ensure payroll calculations are applicable to all French workers, you must configure absence values, work schedule calendars, and holiday calendars.
Workday offers a Touchpoints Kit with resources to help you understand configuration relationships in your tenant. Learn more about the Workday Touchpoints Kit on Workday Community.