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Administrator Guide
Last Updated: 2025-09-19
Setup Considerations: Manual Payments

Setup Considerations: Manual Payments

You can use this topic to help make decisions when planning your configuration and use of manual payments. 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 They Are

Manual payments enable you to record payments made outside of Workday Payroll. Manual payments can either replace a worker's regular pay or add to it. Payroll for Ireland only supports manual additional payments.

Business Benefits

You can record manual payments to workers at any point in time, including in prior periods.
Workday calculates employer statutory taxes for manual payments, and updates the accounting and ledger.

Use Cases

You can run manual payments to record external payments such as cash or checks to:
  • Record payments that workers issue in advance to cover deductions for a future leave of absence with no pay.
  • Correct a payroll error.
  • Record adjustments in the current or prior year to solve tax discrepancies (AUS, CAN, FRA, UK, USA).
  • Record the exercise of stock options.
  • For Payroll for the U.S., record third-party sick pay when the third party withholds employee taxes and transfers liability for the employer taxes to you.
  • Adjust worker taxable wage buckets after a stock sale.
  • Reduce a worker's arrears balance in Workday when a worker pays a deduction using a personal check.
  • Reduce the outstanding balance of a worker's flexible payment and deduction option when the worker repays all or part of the outstanding balance outside of payroll.

Questions to Consider

Questions
Considerations
What volume of manual payments does your company process?
You can use the:
  • Import Payroll Off-Cycle Payment
     web service to mass load manual payments.
  • Dedicated task to enter manual payments in low volumes.
What taxes or pay components do you want to calculate for the manual payments?
You can configure which pay components to process in manual payments on the
Off Cycle (On Demand Additional, Manual)
 tab of your run category. Pay components resolve based on the run category configuration, so Workday calculates amounts when either:
  • The manual payment has entries for the calculation the pay component is using. Example: You configure a pay component to calculate 10% of a pay component related calculation (PCRC). Workday resolves that component only when the PCRC has a manual payment entry. The PCRC can also be from the pay component on the run category configuration.
  • All amounts are contained within the pay component. Example: You configure a pay component to calculate a flat amount of 100.
Which periods do you want to run manual payments for?
You can run a manual payment for a:
  • Subperiod that's no later than the next period to process. The status of the subperiod is either
    In Progress
     or
    Not Yet Started
    .
  • Completed prior period up to 6 years before the current period.
To record payments before the effective date of your first Workday Payroll transactions, load them as payroll history. Examples: Bonus wages paid by a company you acquired, earnings that contribute to year-to-date reporting, or pay balances used in payroll calculations.
Payroll for Ireland doesn't support corrections or reversals.
How do you want manual payments to impact the worker's payroll?
You can run a manual payment to either:
  • Replace a worker's regular pay and exclude the worker from regular on-cycle payroll for that period.
  • Add to a worker's regular pay for the period. Workers can have multiple additional payments for 1 subperiod.
To impact a worker's regular pay and pay the worker in Workday, use payroll inputs or on-demand payments. Example: You can use payroll inputs to process a refund on a worker's pay.
Do you want to prevent payroll administrators and partners from running manual payments for themselves?
Workday user interface tasks automatically prevent any user from adding or editing payments for themselves. Users can only run manual payments for themselves by using a web service. To prevent them from doing so, select the
Payroll Web Services - Do Not Allow Add/Update for Worker as Self
 check box on the
Edit Tenant Setup - Payroll
 task.

Recommendations

For Payroll for Australia, run manual payments instead of on-demand payments to adjust tax amounts, since Workday calculates employee taxes and superannuation for on-demand payments.
For Payroll for Canada and the U.S., run manual payments instead of on-demand payments to:
  • Adjust tax amounts, since Workday calculates employer and employee statutory taxes for on-demand payments.
  • Achieve a specific amount on year-end forms for withholding.
For Payroll for Ireland, run manual additional payments instead of on-demand additional payments to adjust tax amounts, since Workday calculates employee taxes for on-demand payments.
For Payroll for the UK:
  • Run on-demand payments instead of manual payments to adjust payment amounts, since Workday calculates employer and employee statutory taxes for on-demand payments and reports the amounts to HMRC.
  • Run manual payments instead of on-demand payments in situations where you need to adjust tax amounts, since Workday doesn't calculate employer and employee statutory taxes for manual payments. Consider running manual payments for pay periods before the previous pay period, since it's likely you need to correct tax amounts. Manually add related calculations for statutory taxes.
For Payroll for the U.S., to prevent calculation errors when running manual payments for FLSA, indicate end dates that correspond to the appropriate FLSA period.
To change the pay period date that you're targeting for the manual payment, cancel the manual payment and run another one.
For best performance when loading manual payments in bulk, use the
Import Payroll Off-Cycle Payment
 web service.

Requirements

Verify bank account information by making sure that:
  • There's at least 1
    Manual
    Payment Method
     configured on the
    Maintain Payment Types
     task.
  • The bank account setup for payroll payments has a
    Manual
    Allowed Payment Type
    .

Limitations

You can't:
  • Replace manual payment values with payroll inputs you enter on the
    Add Payroll Input by Worker
     task. Use on-demand payments instead (AUS, CAN, FRA, UK, USA).
  • Cancel completed manual payments that you ran for prior periods.
  • Calculate employee taxes or supplemental taxes on manual payments in Workday. Use on-demand payments instead.
You can:
  • Run manual payments for periods with a forward accrual, but Workday won't create an accrual.
  • Settle positive manual payments, but not negative ones.

Tenant Setup

Use the
Edit Tenant Setup - Payroll
 task to:
  • Set the accounting date for off-cycle payments as either the payment date or the period end date.
  • Prevent users from using a web service to create manual payments for themselves.

Security

Configure these domains in the Core Payroll functional area:
Domains
Considerations
Process: Off-Cycle
Enables users to run manual payments in batches.
Process: Off Cycle (Manual Payment)
Enables users to run manual payments.
Reports: Pay Calculation Results for Pay Group (Results)
Enables users to:
  • Adjust priorities for manual payments.
  • Display manual payments by pay group and period.

Business Processes

No impact.

Reporting

You can use the:
  • Pay Calculation Off-cycle Inputs for Group of Workers
     report to display manual payments by pay group and period. You can run it for specific statuses, batch IDs, or both.
  • Payroll Off-cycle Payments for Group of Worker
     report data source to create a custom report that contains manual payment information.

Integrations

You can use the
Import Payroll Off-Cycle Payment
 web service to load high volumes of manual payments, and then:
  • Adjust the priority of each payment.
  • Process the payment using the
    Run Off-cycle Pay Calculation
     task.
You can also use the web service to run manual payments in bulk as reversals of other off-cycle payments.
Payroll for Ireland doesn't support reversals.

Connections and Touchpoints

Features
Considerations
Payroll processing
For a worker in a given pay group and period, you can run multiple payments types. Workday processes the payments in this order to update pay accumulations and pay balances:
  1. Manual
  2. Reversal
  3. On-demand
  4. On-cycle
Run category
You can configure which pay components to process in manual payments on the
Off Cycle (On Demand Additional, Manual)
 tab of your run category.
Settlement
When you run manual payments, Workday updates the accounting and ledger, even though you process the payment itself externally. Ensure that you provide accurate bank account information.
Year-end processing
You can run manual payments to correct workers' wages and taxes for a prior period. When these payments have an effect on year-end forms, complete all manual payments before finalizing year-end data for your workers.
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.