Skip to main content
Documentation
Documentation
Administrator Guide
Last Updated: 2023-06-23
Concept: Retro and Limits

Concept: Retro and Limits

You can limit retro pay calculations based on:
  • Earnings.
  • Deductions.
  • Pay component related calculations (PCRCs).
When you calculate payroll for the target period, Workday includes retro differences to the current earning or deduction.
Workday reduces the total retro difference for the recalculated periods to the earning and deduction limit when those differences exceed that limit.
Example: Deduction Limit
Flora earns weekly base wages of 1000. She has a deduction that is 20% of base pay with a limit of 250 each period. Workday deducts 200 for each of the first and second weekly periods.
In week 3, Flora receives a retroactive increase to 1200 for her base pay effective week 1. This change increases her regular deduction to 240. To complete the adjustment, week 3 needs a total deduction of 320 (240 + 80 in retro). This adjustment exceeds the 250 limit set for Flora.
Workday takes the retro deduction first, which is 40 each week, or 80 total. Given the 250 limit, there's 170 left for the week 3 deduction, the remaining 70 of which goes into arrears.
Workday calculates her total base pay:
Week 1
Week 2
Week 3
Base pay amount
1000
1000
1200
Retro base pay amount
200
200
Total base pay amount
1200
1200
1200
Workday calculates the total deduction due:
Week 1
Week 2
Week 3
Deduction: 20% up to 250 before increase
200
200
Deduction: 20% up to 250 after increase
240
240
240
Retro deduction difference
40
40
80
Sum of deductions due in week 3
320
Workday calculates the retro amount and arrears up to the limit:
Week 1
Week 2
Week 3
Sum of deductions due in week 3
320
80 retro deduction taken up to the 250 limit
250 - 80 = 170
170 remaining deducted from the 240 regular deduction
240 - 170 = 70
Amount due in arrears
70
Example: Earning Limit
Jane is eligible for wellness reimbursements of up to 600 for the year. She receives a payment of 200 for each of the first 2 monthly pay periods. In month 3, she receives a retroactive increase for the first month to 350 so you run the retro pay calculation.
Workday generates a 150 difference for the first pay period and forwards it to the current pay period.
When you calculate payroll for the current period, Workday considers the total retro difference for the reimbursement (150). When it calculates the current reimbursement (150 + 400 previously paid = 550), it is below the 600 limit by 50. Workday calculates a current value of the Wellness reimbursement of 50.
Month 1
Month 2
Month 3
Wellness reimbursement
200
200
50
Retro increase
150