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Administrator Guide
Last Updated: 2025-03-14
Concept: Retro Payroll Accounting

Concept: Retro Payroll Accounting

You can run the
Maintain Payroll Accounting Options
 task secured to the
Set Up: Payroll (Calculations – Payroll Specific)
 domain in the Core Payroll functional area to configure retro costing. The task enables you to update the retro result lines for the retro pay period instead of the current period to reflect:
  • Costing rules.
  • Budget date.
  • Payroll attributes.
When you select the
Enable Retroactive Costing
 check box on the task, Workday applies retro to all types of costing, including:
  • Earnings.
  • Deductions.
  • Employer-paid expenses.
  • Fringe recovery.
You can also select specific
Earnings to Exclude from Retro Costing
, to keep the costing in the current pay period. If there are multiple retro events during a period, Workday evaluates the retro costing rules. Workday applies effective dates for costing and retro events.
For Payroll for the U.S., the Configuration for Retro Lines with Salary Cap Grant section enables you to have the system charge retro amounts either over or under a salary cap grant by default when you run retro payroll calculations. You can also configure retro lines specific to salary cap grants to cost fully over or under the cap for certain job families, job family groups, and job profiles. If the job profile associated with a retro line matches the job profile you specify or belongs to the job family or job family group that you configure, then the behavior you select applies to the retro line.
Retroactive Costing
In July, a worker receives a bonus pay of 1000 that is retroactive to the month of January. Their cost center in January was CC100. In March, they moved to a different department and their cost center changed from CC100 to CC500. Their current pay period is July. When you
Enable Retroactive Costing
 and run a retro pay calculation for the bonus pay, Workday applies the costing from the retro pay period instead of the current period. Their bonus is charged to cost center CC100 instead of CC500.
Retro Costing to Salary Cap Grant (USA)
You have a worker who is a full-time professor earning a salary associated with a grant subject to a salary cap: SOC Grant A.
  • They earn $72,000 as a base annual salary, and they’re on a monthly period schedule earning $6,000 per month.
  • SOC Grant A is subject to the award salary cap of $240,000 base annual salary, or $20,000 per month.
The worker is subject to these costing allocation rules:
  • For salary covered by the grant subject to the salary cap: SOC Grant A, Fund A, Cost Center A at 100%.
  • For the salary over the cap portion: Fund B, Cost Center B at 100%.
Default
SOC Suballocation
Distribution Percent
SOC Grant A
Fund A
Cost Center A
100%
Fund B
Cost Center B
100%
The worker earns their normal monthly salary from January to June. In July they receive an annual salary increase to $84,000, or $7,000 per month, which is retroactive to June. When you run the
Run Retro Pay Calculation
 task in July, Workday pulls in the worker’s salary increase as a retro event. After the next payroll calculation, the Actuals journal reflects the retro differences and the costing configuration for lines with salary over the cap grants.
If you have
Default Over Cap
 selected, Workday allocates the retroactive $1,000 to the worker’s suballocation, which is Fund B, Cost Center B for June, and the current $7,000 to SOC Grant A, Fund A, Cost Center A. The Actuals journal on the worker’s payroll result for July displays their current payroll period earnings and the retro earnings lines:
Default
SOC Suballocation
Distribution Amount
Budget Date
Fund B
Cost Center B
1000
2023-06-30
SOC Grant A
Fund A
Cost Center A
7000
2023-07-31
If you have
Default Under Cap
 selected, Workday allocates the retroactive $1,000 and the current $7,000 to SOC Grant A, Fund A, Cost Center A for June:
Default
SOC Suballocation
Distribution Amount
Budget Date
SOC Grant A
Fund A
Cost Center A
1000
2023-06-30
SOC Grant A
Fund A
Cost Center A
7000
2023-07-31
If you configure a row in the table to have Professor as a Job Profile or select the Job Family to which the Professor job belongs, then retro processing respects your choice to
Cost Fully Over Cap
 or
Cost Fully Under Cap
 for those selections rather than follow your default choice.