Concept: Retro Terminated Worker P45 Creation (UK)

When you terminate a worker retrospectively and run the

Run Retro Pay Calculation

task, before creating their P45 check if their retro result contains a:

Nonzero retro difference.

Zero retro difference.

The actions you must take before generating a worker's P45 depends on the type of retro difference affecting them.

Zero Retro Difference

Terminated workers with a zero retro difference have no change to their last completed period payroll calculation. Having no change means that the values for their Workers Taxable Pay Year To Date
and Tax Paid Year To Date
values are accurate and you can create their P45.

Nonzero Retro Difference

Terminated workers with a nonzero retro difference have a change to their last completed period payroll calculation. This difference often means that there’s a change to their Workers Taxable Pay Year To Date
and Tax Paid Year To Date
values that would result in an inaccurate P45.

You must process and complete a payroll calculation to correct the values Workday uses when creating a P45. You can process 2 types of nonzero retro differences:

Negative Retro Difference.

For workers with negative retro differences, resolve their negative net pay and complete the result. Example: Offset the difference using an appropriate earning or deduction.

Positive Retro Difference.

For workers with positive retro differences, process and complete both retro and regular payroll before creating P45s.

Example

Albert, Billie, and Jade were all terminated retrospectively, the previous pay period is complete, and you must process their terminations through retro. They all left on different dates and have different circumstances to pick up in retro.

Employee	Last Period Gross	Termination Date	Retro Difference
Albert	5000	July 30	0
Billie	4500	July 15	(2250)
Jade	6400	July 29	377.43

Albert terminated on the last day of the month. They don't owe any salary to the business and aren't owed any holiday pay.

Billie terminated on July 15. They owe 15 days salary to the business. They aren't owed any holiday pay:

4500 gross / 30 days * 15 days = 2250

2250 * -1 = (2250)

Jade terminated on July 29. They owe 1 day of salary to the business, but are owed 2 days holiday pay:

6400 gross / 30 days = 213.33 per day

213.33 * -1 = (213.33)

76800 annual gross / 260 working days = 295.38 per day

295.38 * 2 holiday pay days = 590.76

(213.33) + 590.76 = 377.43

Employee	Retro Calculation Complete	Pay Adjustment	On-Cycle / Off-Cycle Calculation Complete
Albert	Yes	N/A	N/A
Billie	Yes	Yes	Yes
Jade	Yes	N/A	Yes