Concept: Retro and Arrears
The
Run Retro Pay Calculation
task doesn't put deductions into arrears or recoup arrears generated in completed pay periods. Workday considers arrears when calculating the retro difference for a deduction that had a prior period arrears balance.When a retro deduction and a regular deduction combined exceed worker's pay, Workday applies the amount to retro first and forwards the remainder to regular pay. Workday then places the amount over the limit in arrears.
Example: Deduction with Prior Period Arrears Balance
Helen earns a base pay for the current period of 120. Their pay isn't enough to cover a lower priority deduction, so part of it goes into arrears:
Current Amount | Amount Taken | Arrears Amount | |
|---|---|---|---|
Base pay | 120 | ||
Medical deduction | - 100 | - 100 | |
Dental deduction | - 24 | - 20 | - 4 |
After the pay period is complete, you increase Helen's base pay retroactively to 150. Due to a premium increase, the medical deduction increases to 110, and the dental deduction increases to 25. When you run retro, Workday calculates these differences:
Current Amount | Amount Taken | Arrears Amount | Retro Difference | |
|---|---|---|---|---|
Base pay | 150 | 150 - 120 = 30 | ||
Medical deduction | - 110 | - 100 | 110 - 100 = - 10 | |
Dental deduction | - 25 | - 20 | - 4 | 25 - 20 - 4 = - 1 |
Example: Arrears Recouped from Refunded Deduction
John is on a biweekly pay schedule. On August 1, they have a qualifying event and wants to waive medical coverage but notifies you only on August 17. John is also on unpaid leave from August 16 to August 31. On August 17, you enter a retro benefit change, and run retro and payroll. John doesn't have any regular pay to cover his deductions in the current pay period. Workday recoups the deductions from the refunded retro amount, and puts the remaining deduction into arrears:
August 1 - August 15 | August 16 - August 31 | |
|---|---|---|
Base pay | 200 | Zero |
Medical deduction | - 30 | 30 (retro refund) |
Dental deduction | - 20 | - 20 |
Commuter benefit deduction | - 15 | - 15 |
Remaining pay | 200 - 30 - 20 - 15 = 135 | 30 - 20 - 15 = - 5 |
Example: Negative Retro Difference
When you make a retroactive change to a deduction with arrears that results in a negative retro difference, Workday recoups those deductions before recouping other deductions with arrears.
Bob is on a monthly pay schedule. In January, their medical deduction of 100 goes into arrears. You retroactively place Bob on leave beginning January 16. When you run retro in February, Workday calculates a retro difference of -50. Bob returns from leave on February 1. When you run on-cycle payroll for February, Workday attempts to recoup the arrears for the medical deduction first, because it has a negative retro difference. Workday then attempts to recoup other deductions with arrears balances.
Example: Negative Retro Difference with Insufficient Minimum Net Pay
Barb's medical deduction of 150 goes into arrears for 2 periods. They then request that you retroactively cancel their medical coverage due to a life event. When you run retro, Workday calculates a -300 retro difference. Barb's base pay for the current period is 50, and they have a dental deduction of 100. Minimum net pay is zero. When you run on-cycle payroll, Workday first resolves current period deductions, and then attempts to recoup deductions with negative retro differences before recouping other deductions with arrears balances.
Retro Pay Calc | On-Cycle Pay Calc | Amount Available for Deductions / Recouping | Notes | |
|---|---|---|---|---|
Medical Retro Difference | -300 | -300 | ||
Base Pay | 50 | 50 - (-300) = 350 | Workday adds negative retro difference to net pay. | |
Dental Deduction | 100 | 350 - 100 = 250 | Workday takes dental deduction first. | |
Medical Arrears Balance | 300 | 300 - 250 = 50 | 250 - 250 = zero | Workday recoups partial arrears balance. |
Net Pay | Zero | Zero |
To identify workers with negative retro differences, you can run the
Retro Calculation Processing Report
and its subreports Retro Results Report
and Payroll Results Report
.