Setup Considerations: On-Demand Payments
You can use this topic to help make decisions when planning your configuration and use of on-demand payments. 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
On-demand payments enable you to pay a worker outside of their regular pay cycle.
- On-demand replacement payments replace a worker's regular on-cycle payment.
- On-demand additional payments issue payment in addition to a worker's regular pay.
Payroll for Ireland only supports on-demand additional payments.
Business Benefits
On-demand payments enable you to pay a worker:
- Without waiting for the next regular pay cycle.
- For a prior period.
For Payroll for Australia, Canada, Ireland, the UK, and the U.S., Workday automatically calculates employer and employee statutory taxes for on-demand payments, and updates the accounting and ledger.
For Payroll for France, Workday calculates and reports social contributions while:
- Applying rates and ceilings from the original period
- Calculating ceilings, SMIC, and other limits in the regular period
- Calculating and reporting taxes and income tax withholding using rates and limits effective on the payment date
Use Cases
- For Payroll for Australia, Canada, France, the UK, and the U.S., you can use on-demand replacement payments to:
- Calculate final pay for a worker who's terminated midperiod and needs their pay immediately.
- Pay a worker who has no regular results for the period. Example: Timesheet not processed.
- Correct a payroll error for Payroll for Australia, Canada, the UK, and the U.S.
You can use on-demand additional payments to:
- Issue a one-time payment to a worker, such as a spot bonus.
- Pay a worker for hours that they report after the end of the pay period.
- Issue a trailing payment to a worker after they transfer internationally, for amounts they earned in their previous position for Payroll for Canada, Ireland, the UK, and the U.S.
- Pay a bonus or other payment to a terminated worker.
- Issue profit-sharing payments for Payroll for France.
- Hire workers retroactively for Payroll for France.
Questions to Consider
Question | Considerations |
|---|---|
Does your company process large volumes of on-demand payments? | Consider using the Import Payroll Off-Cycle Payment web service to mass import on-demand payment data that Workday uses to calculate payments. |
Does your company pay bonuses intermittently? | You can process one-time bonuses as on-demand additional payments. |
Do you need to pay terminated workers immediately? (AUS, CAN, FRA, UK, USA) | You can create an on-demand replacement payment for the worker. When the termination date is:
|
Do nonpayroll administrators at your company need to calculate final pay for terminated employees on their termination date (USA)? | You can enable nonpayroll administrators to calculate and generate termination-day paychecks by configuring the On Demand Event business process as part of the Termination business process. |
Do you want to issue a check for additional pay separately from the regular paycheck? | An on-demand additional payment generates a separate check and payslip. To include additional pay on a worker's on-cycle check, add payroll input instead. |
Do you want to prevent payroll administrators and partners from running on-demand payments for themselves? | User interface tasks automatically prevent users from adding or editing payments for themselves. They can only run on-demand payments for themselves using a web service. You can prevent them from doing so by selecting the Payroll Web Services - Do Not Allow Add/Update for Worker as Self check box on the Edit Tenant Setup - Payroll task. |
What do you call payments that you make to workers who transfer internationally (CAN, IRL, UK, USA)? | Workday refers to this type of payments as trailing payments for international transfers. The preset name for this check box is Trailing Payment, which you can change using the Maintain Custom Labels task. |
Recommendations
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.
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
Complete any on-demand replacement payments for a terminated worker before removing the worker from a company or pay group.
For Payroll for Ireland:
- Only process off-cycle payments using a payment date within the date range of the pay period you're processing the payment for to ensure accurate calculation of taxes for the worker.
- 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 Revenue.
- Workday recommends that you don't run on-demand payments for a prior period in which the worker was transferred mid-period. Workday recommends transferring workers at the start of a pay period.
Requirements
To ensure accurate processing, specify which pay components to calculate for on-demand payments on the
Create Run Category
task. Limitations
- You can only create 1 replacement payment for a worker in a period, pay group, and company. When the pay period has subperiods, you can create 1 replacement payment per subperiod (AUS, CAN, FRA, UK, USA).
- When you create a replacement payment, Workday excludes the worker from the regular on-cycle run for that period or subperiod (AUS, CAN, FRA, UK, USA).
- Workday doesn't prorate on-demand additional payment amounts.
- You can only run replacement payments for periods or subperiods that you haven't completed (AUS, CAN, FRA, UK, USA).
- You can only run trailing payments for the current or next period. Workday doesn't support trailing payments for workers on international assignment, or who have multiple jobs in the current or prior periods (CAN, IRL, UK, USA).
- You can apply supplemental taxation to on-demand replacement payments only on nonregular run categories that you set to use nonregular taxation (USA).
- When you complete retro for a retro hire in a subperiod, Workday creates a zero pay result for the subperiod. Therefore, you can't run on-demand replacement payments for that subperiod (AUS, CAN, FRA, UK, USA).
- Workday doesn't recover outstanding arrears balances for on-demand additional payments (AUS, CAN, IRL, UK, USA).
- You can't add attachments to a payroll input that is directly entered on an on-demand payment.
Tenant Setup
You can use the
Edit Tenant Setup - Payroll
task to determine whether to:
- Use the payment or period end date as the accounting date for off-cycle payments.
- Consider completed on-demand additional payments when you determine retro processing periods.
- Prevent users from running on-demand payments for themselves when using a web service.
Security
Domains | Considerations |
|---|---|
Custom Label Management domain in the System functional area. | Enables you to customize labels for trailing payments. |
Process: Off Cycle (On Demand) domain in the Core Payroll functional area. | Enables you to create on-demand payments. |
Business Processes
You can add an on-demand payment to a business process as a
To Do
step, such as on Add/End Additional Job
, Onboarding
, Compensation Change
, or Leave Event
.Reporting
Reports or Data Sources | Considerations |
|---|---|
Pay Calculation Off-cycle Inputs for Group of Workers report | Review on-demand payments by pay group and period or subperiod. |
Payroll Calculation Processing Report
| Take any of these actions on on-demand payments:
|
Payroll Off-cycle Payments for Group of Worker report | Use this data source to create a custom report that lists on-demand payment information. |
FRA Payroll Journal by Company report (FRA)
FRA Payroll Journal by Establishment report | View an aggregated view of payroll results based on the payslip configuration.
You can also filter on-cycle or on-demand payroll results by:
|
FRA Pay Calculation Results – Payslip View report (FRA) | View payroll results for multiple workers in a presentation similar to a payslip. You can filter payroll results by accounting date. |
Integrations
Workday recommends that you use the
Import Payroll Off-Cycle Payment
web service when you mass load on-demand payments. Connections and Touchpoints
Features | Considerations |
|---|---|
Payroll inputs | You can load payroll inputs to create on-demand payments. |
Retro pay calculation | You can load retro differences as inputs for on-demand payments. |
Workday offers a Touchpoints Kit with resources to help you understand configuration relationships across your tenant. Learn more about the Workday Touchpoints Kit on Workday Community.