Concept: Payroll Third-Party Payable Items
When you enable payroll third-party payments for a deduction recipient, Workday generates a third-party payable item for each result line where a payment should be sent to that recipient.
In addition, the deduction recipient associated with the payable item becomes a worktag on the payroll result line.
Workday generates payroll third-party payable items for on-cycle and off-cycle payments (including reversals), but not for payroll history results.
To generate payments to a third party, add the payroll third-party payable items to a settlement run. You can only add payable items from completed payroll results.
These retro adjustments to a previously created payable item are not supported:
- Company change
- Pay group change
- Benefit provider change
In other words, Workday will not process changes to existing payable items resulting from those retro events.
If you recalculate a payroll result with a payroll third-party payable item, it displays as a changed payroll result, even if you didn't make any changes to it. This behavior does not occur when you enable Smart Calculation options.
Always Separate Payments
When you enable Payroll Third-Party Payments for a deduction recipient, Workday automatically selects the
Always Separate Payments
checkbox. This setting generates an individual payment for each payroll third-party payable item.Keep this option selected if:
- The payable item and payment have a 1:1 relationship.
- You send the case or reference number at the payment level of an electronic payment. For more information, see Create a Payment for an Income Withholding Order or Court Order.
If you clear the checkbox and include multiple case or reference numbers in the same electronic payment, Workday sends only 1 case or reference number with the payment. When you add payable items to a settlement run, Workday aggregates payable items by:
- Company
- Currency
- Deduction Recipient Snapshot
- Payment Type
Reporting
When Workday generates third-party payable items within a payroll result, the
Payroll Third-Party Payment
tab on the Pay Calculation Result for Worker
report displays details about each item.You can use the
Payroll Third-Party Payable Open Items
report to audit payroll third-party payable items that are not paid. You can also use these reports throughout the payroll third-party payment process:
- All Open Items by Amount for Payment Category (worklet within the Settlement Work Area Dashboard)
- Find Payments
- Find Payment Returns
- Find Settlement Runs
- Payment Counts by Status
- Payment Returns by Month
- View All Payments
- View Check Register
- View Direct Deposit Register
In addition, you can generate custom reports using the:
- Payroll Third-Party Payments Application business object
- Payroll Third-Party Payments business object
- Payroll Third-Party Payments data source
- Payroll Third-Party Payable Item business object
For more information, see Create Custom Reports.
Settlement
Once you complete payroll results, you can add payroll third-party payable items to a settlement run. Items related to settlement have these statuses:
- Available for Settlement: Indicates that you can add the item to a settlement run.
- Document Status: Indicates if a payment has been generated for the item.
For Payroll for Australia, Canada, France, and the U.S., when you create a settlement run, the Settlement Run Date becomes the payment date for payable items.
For Payroll for the UK, the Settlement Run Date field represents the processing date. Workday uses the processing date to determine the first date for the clearing process.
You can schedule the settlement of payroll third-party payable items with the
Schedule Settlement Run
task, or create a manual settlement run. For more information, see Create Manual Settlement Runs. You can manually search for and add payroll third-party payable items to a settlement run using the
Payroll Third-Party Payments
payment category. Workday references this payment category in bank account setup, bank routing rules, settlement, and settlement-related reports. To add the payable items using filters, select
System Filters
from the Auto-Select Filter
prompt and apply the All Available Payroll Third-Party Payments
filter. For more information, see Setup Considerations: Settlement Run Filters.You can also create custom filters by accessing the
Create Settlement Run Custom Filter
task and selecting Payroll Third-Party Payment
from the Payment Source
prompt. For more information, see Define Settlement Run Custom Filters.Payment instructions for a deduction recipient may change. To support this, you can update
Payment Type
, Always Separate Payments
, Address
, and Settlement Bank Account
for the deduction recipient snapshot associated with a payable item until you add the payable item to a settlement run.Once you add a payroll third-party payable item to a settlement run, you can't add it to another settlement run unless:
- You cancel the original settlement run you added the payable item to.
- You cancel, return, or stop the original payment generated for the payable item.
You can’t cancel the completion of a payroll result if Workday has generated a payment for a payable item associated with the result.