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Administrator Guide
Last Updated: 2025-09-19
Setup Considerations: Adjustments for Prior Periods

Setup Considerations: Adjustments for Prior Periods

You can use this topic to help make decisions when planning your configuration and use of adjustments for prior periods for Payroll for Canada, Ireland, the UK, and the U.S. It explains:
  • Why to set them up.
  • How they fit 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 They Are

Prior period adjustments enable you to run payments before the current in-progress period.

Business Benefits

Adjustments for prior periods give you the flexibility to correct past payments and help reduce manual processing by automatically:
  • Calculating employer and employee statutory taxes for on-demand payments.
  • Calculating employer statutory taxes for manual payments.
  • Updating payroll accounting and ledger.

Use Cases

You can adjust prior payroll periods to:
  • Correct an inaccurate gross wages amount.
  • Record a personal check that workers issue to pay deductions in advance.
  • Reverse incorrect final payments to terminated workers.
  • Pay a worker for hours that they report after pay period already ended.
  • Correct payroll for workers who enter an address change after you already calculated their taxes for Payroll for the UK and the U.S.
You can also adjust prior periods for year-end form corrections such as when:
  • Workers enter inaccurate tax elections (USA).
  • Workers don't update their tax elections when they move to a new state or locality and you need to adjust wage accumulators (USA).
  • Third-party stock vendors report a transaction for a worker after their form is already complete (UK, USA).
  • Workers report a gift card after their form is already complete (UK, USA).
For Payroll for Ireland, only adjust prior periods for year end when the payment date falls within the period date range.

Questions to Consider

Questions
Considerations
How do you want to process the adjustments?
You can process an adjustment:
  • As part of the workers' regular on-cycle pay, by creating a payroll input.
  • During the workers' regular on-cycle pay, but with a separate check, by creating another run category (CAN, USA).
  • Outside the workers' regular on-cycle pay, by running on-demand payments to replace or add to their pay.
    Payroll for Ireland doesn't support on-demand replacement payments.
You can also enter adjustments for payments made outside of Workday by running manual payments. Example: You want to record a personal check that a worker issues to clear arrears.
What's your timeline for entering adjustments?
You can use off-cycle payments to adjust prior periods you process in Workday up to 6 years before the current in-progress period. For periods that you haven't yet reconciled with a bank statement, you can run payment reversals.
Payroll for Ireland doesn't support payment reversals.
You can also consider using retro pay processing for earlier periods that are after the workers' No Retro Processing Prior To date. Retro doesn't recalculate taxes:
  • In prior periods for Payroll for Canada and the U.S.
  • In prior periods for all events for Payroll for Ireland and the UK.
What's the volume and frequency of adjustments?
For large volumes of adjustments, instead of running multiple off-cycle payments, you can:
  • Run batch payments for one-off or intermittent payments using the
    Import Payroll Off-Cycle Payment
     web service. Example: You want to correct 1 deduction taken for all part-time workers.
  • Create a new period schedule and run category for recurring prior period adjustments. Example: Every year, some data required for year-end processing is only available after you already complete the previous year.
Which tax tables do you want to apply (UK, USA)?
Workday uses the payment date to determine which tax tables to apply in off-cycle processing. Pay period end dates control the period for reporting and accounting transaction posting. To make prior period tax adjustments, you can run off-cycle payments for:
  • Prior periods, to post the transaction in those periods.
  • The current period with a payment date in a prior period, to post the transaction in the current period, while applying taxes from a prior period. You can configure this behavior at the tenant level.
Example: To correct taxes in the first quarter, you can run a payment in the current payroll period while using a check date from January 1 to March 31. Workday then posts all accounting transactions in the current period, which can help reporting prior period transactions in external accounting systems.
You can run manual payments to enter tax amounts manually.
What's the effective date of your first Workday Payroll transactions?
To record payments before the effective date of your first Workday Payroll transactions, load them as payroll history. Examples: Load payroll history for bonus wages paid by a company you acquired, or earnings that contribute to year-to-date reporting.
You can change these history payments, but these corrections don't impact production payroll results that are already complete. For Payroll for the UK and the U.S., Workday adjusts self-correcting percentage taxes in the next payroll.
Adding or changing historical results for a worker can impact calculations and results that use historical balances. Therefore, when you do so for workers with existing payroll results in Workday, verify all their current calculation results.
For Payroll for the U.S., Workday doesn't calculate FLSA amounts based on historical amounts. You can adjust this type of FLSA amounts manually either by:
  • Loading them as payroll history.
  • Entering payroll inputs and processing them in retro pay calculations.

Recommendations

To adjust tax amounts, use manual payments instead of on-demand payments because:
  • Workday calculates employer and employee statutory taxes for on-demand payments.
  • Manual payments provide you the flexibility to record a payment without all the pay processing requirements such as payroll bank account or settlement information.
For Payroll for the U.S., don't move workers from 1 FLSA calendar to another because it can cause unexpected results when processing prior period adjustments.
Payroll continues to process successfully even when the associated accounting journals are in error. Workday flags those errors only when you attempt to reverse or cancel completed results. To prevent issues with third-party systems, run the
Fix Operational Journals With Errors
 report as part of the payroll process to audit and fix those errors.

Requirements

To ensure proper processing, specify which pay components to calculate for on-demand payments on your run categories.

Limitations

You can open the next period to on-demand payments only after the workers' prior or current period results are complete. After you create a payment in that next period for a worker, you can't create new results for them in the current or prior periods.
For some retro events such as retro hire, the retro pay calculation creates a zero pay result for the processed prior period. Therefore, you can't run on-demand replacement payments for the same subperiod.
You also can't:
  • Cancel completed off-cycle payments that you run for prior periods.
  • Issue trailing payments for prior periods.
  • Include retro differences in prior period payments.
For Payroll for the UK, when you adjust prior tax years, Workday doesn't always automatically update HMRC using Real Time Information (RTI). Make sure to reconcile results and run on-demand additional payments as needed by using the:
  • Earlier Year Update (EYU) process for the 2018-2019 and 2019-2020 tax years.
  • RTI Employer Payment Summary (EPS) and Full Payment Submission (FPS), from the 2020-2021 tax year onwards.

Tenant Setup

You can use the
Edit Tenant Setup - Payroll
 task to:
  • Prevent payroll administrators and partners from running on-demand payments for themselves using web services.
  • Use the payment date instead of the period end date that contains the adjustment as the accounting date.

Security

Domains
Considerations
Process: Off-Cycle
 in the Core Payroll functional area.
Enables users to run manual payments in batches.
Process: Off Cycle (Manual Payment)
 in the Core Payroll functional area.
Enables users to run manual payments.
Process: Off Cycle (On Demand)
 in the Core Payroll functional area.
Enables users to create on-demand payments.
Process: Period End
 in the Common Financial Management functional area.
Enables users to access reports to check the status of accounting periods.
Process: Run Batch Cancel Complete
 in the Core Payroll functional area.
Enables users to cancel a completed on-cycle payroll.
Process: Tax Filing/W-2s (Reports) - USA
 in the USA Payroll functional area (USA).
Enables users to view reports related to tax filing and W-2s.
Process: Tax Filing (Reports) - CAN
 in the CAN Payroll functional area (CAN).
Enables users to view reports related to tax remittances.
Reports: Pay Calculation Results for Pay Group (Results)
 in the Core Payroll functional area.
Enables users to:
  • Adjust priorities for manual payments.
  • Display on-demand payments by pay group and period.
Worker Data: Payroll (Payroll Input)
 in the Core Payroll functional area.
Enables users to view and enter payroll inputs for workers.

Business Processes

No impacts.

Reporting

Reports
Considerations
Ledger Period Journal Status
Enables you to check whether an accounting period is open or closed.
For Payroll for Canada:
  • Provincial Employer Payroll and Health Tax Summary
  • Tax Remittance Summary - Federal
  • Tax Remittance Summary - Quebec
  • Workers Compensation Summary
  • Workers Compensation Summary by Company
Enables you to identify differences caused by prior period adjustments, which require reconciliation with your tax liabilities.
For Payroll for the U.S.:
  • Tax Filing Periodic Data by Company
  • Tax Filing Periodic Data for Worker
  • Tax Filing Quarterly Data by Company
  • Tax Filing Quarterly Data for Worker
Enables you to identify differences caused by prior period adjustments requiring reconciliation with your tax liabilities.
Pay Calculation Off-cycle Inputs for Group of Workers
Enables you to view on-demand payments by pay group and period or subperiod.
View Payroll Input by Worker(s)
Enables you to verify whether Workday already processed a worker's existing pay inputs in pay calculations or retro pay calculations.
View UK RTI FPS Data
 (UK)
Enables you to review FPS values generated for selected payroll results and verify their accuracy.
View Worker UK RTI EYU Details
 (UK)
Enables you to review a worker's RTI data for the previous tax year.
For Payroll for Ireland:
View IRL Revenue Payroll Submission
Enables you to verify payroll results for your Revenue submission and identify any validation errors that may cause Revenue to reject the submission.
You can create custom reports for prior period adjustments using the:
  • Journal Lines
     report data source.
  • Payroll Accounting Filter (by Payment Date)
     data source filter.
Example: You manage your accounting externally and want to identify which adjustments to report since your last integration run.
You can also use the
Payroll Off-cycle Payments for Group of Worker
 report data source to create custom reports about off-cycle payments.

Integrations

You can use these web services to mass load data:
  • Import Payroll Input
     for payroll inputs.
  • Import Payroll Off-Cycle Payment
     for on-demand payments.

Connections and Touchpoints

Features
Considerations
Arrears
When workers have an outstanding arrears balance and you want to adjust or clear it, you can use:
  • A one-time adjustment through payroll inputs to process in the next pay period, such as for workers on leave.
  • Manual payments that don't impact existing pay results, such as for terminated workers.
Example: A worker pays a deduction in advance using a personal check.
Payroll accounting
When you run prior period adjustments in an open ledger period, Workday posts the transaction in that period. By default, Workday selects the open ledger period based on the period end date. You can configure your tenant to use the payment date instead.
When you close the period, Workday posts the payment in the next available open period. If there isn't one, the accounting journal goes into error status.
Record of Employment (ROE) reporting (CAN)
When you run prior period adjustments for terminated workers or workers on leave, consider how they affect the earnings reported on their ROE. Some earning changes might require to issue an amended ROE.
Time Tracking
Time Tracking period schedules control the start and end dates that a time tracking period is available for prior period adjustments to time entries.
Year-end processing (CAN, USA)
Before completing year-end forms, complete any pending prior period off-cycle corrections or adjustments that might affect the wage and tax amounts.
You can run adjustments for tax years for which you’ve already created and issued year-end forms. Some changes might require the generation of corrected forms to report those changes.
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.