Concept: Prior Period Tax Adjustment Calculator (USA)

The prior period tax adjustment (PPTA) calculator:

Adjusts the primary work and resident tax authority wages and taxes for a worker when you process retroactive changes.

Produces tax and wage differences for you.

Uses the earning and deduction amounts from the original payroll result to determine the tax authority wage and tax differences.

When determining the tax authority wage and tax limits for the period that you're adjusting, the PPTA calculator:

Includes balances from other payroll results completed before the payroll result that you’re adjusting.

Includes balances from other tax adjustment results that are for payroll results you’ve already adjusted with the PPTA calculator before the payroll result that you’re adjusting.

Recognizes the tax adjustment result as being part of the original pay result for wage and tax limit purposes.

The PPTA calculator doesn’t include balances from pay results that were completed after the pay result you’re adjusting. The exception is for tax adjustment results, which Workday treats as if they’re completed at the same time as the original pay result, regardless of:

Whether the tax adjustment result is completed in a current or prior period.

The completion date and time of the tax adjustment result.

On the

Prior Period Tax Adjustment Calculator

task, you can access these tabs to view and validate the differences before creating your tax adjustment result:

Tab	Description
Tax Adjustment Summary	Displays the employee tax difference and the tax authority differences that Workday uses to create the tax adjustment result. You can: Override the newly calculated taxesbefore creating the tax adjustment result. Define the period and payment date for the tax adjustment result.
Tax Adjustment Details	Displays information about the earnings and deductions paid on the original pay result. You can: Verify the earning and deduction amounts that the PPTA calculator usesas the basis for recalculating the tax authority wages and taxes of the worker. Review the original, new, and difference amounts for all impacted tax authorities.

Retroactive Changes to a Worker’s Position and Location

Using the PPTA calculator for a worker with position-based taxes who had retroactive changes to their position and location will cause an error on the on-demand additional payment. The on-demand additional payment uses the worker's new position, while the worker's position-based taxes calculated in PPTA are based on the old position, causing the error.