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Administrator Guide
Last Updated: 2026-05-15
Steps: Set Up Retro Processing

Steps: Set Up Retro Processing

Review setup considerations for retro processing.
Before you run the retro pay calculation to process past events, configure pay components, related calculations, and run categories.
  1. (Optional) For Payroll for the U.S., select these check boxes from the
    Pay / Retro Calculations
    Retro Calculations - USA
     section of the
    Edit Tenant Setup - Payroll
     task:
    • Enable Retro Processing from Different Tax Authorities to On-Cycle Payroll
    • Enable Taxes on Retro Amounts from Prior Tax Authorities
    Selecting these check boxes enables Workday to forward retro differences to on-cycle payroll and calculate taxes for retro pay based on the tax authorities in effect during the retro periods.
  2. Access the
    Create Earning
    task.
    For earnings, leave the
    Do Not Recalculate During Retro
     or
    Always Gross-Up
     check box clear to have Workday recalculate the earning during retro pay calculations.
    When you leave these check boxes clear and want to reference another pay component, Workday recommends that you select one configured to recalculate in retro. This configuration ensures that retro uses correct amounts when calculating prior periods.
    If you have a pay component that references a pay balance and is set to recalculate during retro, Workday recommends specifying
    Include All Retro Values Based on Earned Period
     on the pay balance rather than
    Include All Retro Values in Current Gross to Net
     to ensure that any retro amounts in your related calculations calculate correctly.
    For Payroll for Canada, Ireland, the UK, and the U.S., to process retroactive changes to time off, use earnings rather than deductions to calculate the value of paid and unpaid time off. You can define negative earnings to subtract paid and unpaid time from a worker's base pay.
    Security:
    Set Up: Payroll (Calculations - Payroll Specific)
     domain in the Core Payroll functional area.
  3. Access the
    Create Deduction
     task.
    Select the
    Recalculate During Retro
     check box to have Workday recalculate the deduction during retro pay calculations.
    Workday recommends that:
    • You don't select this check box for percentage-based deductions. Example: Percentage-based pension contributions.
    • When you select this check box and want to reference another pay component, select 1 configured to recalculate in retro.
    Security:
    Set Up: Payroll (Calculations - Payroll Specific)
     domain in the Core Payroll functional area.
  4. (Optional) Set up pay component related calculations. See Concept: Pay Component Related Calculations.
    To forward related calculations to the current period for a pay component, select
    Bring Forward Difference
     on the
    Retro Adjustment Type
     tab of the calculation.
    When you leave the check box clear, Workday pulls the full amount of the calculation into the worker's current period.
  5. Access the
    Edit Run Category
     task.
    To process retro for terminated workers, configure these statuses on the
    General
     tab:
    • Terminated with Retroactive Events (for Retro Pay Calc only)
      : To calculate retro differences for terminated workers, for events occurring during or after the period that includes the termination date.
    • Terminated with Retro Differences
      : To pay retro differences for terminated workers when you run payroll.
    Security:
    Set Up: Payroll Pay Group Specific
     domain in the Core Payroll functional area.
  6. (Optional) Access the
    Configure Smart Calculation Event Processing
     task.
    Access the
    Payroll Retro Event Categories
     tab.
    For each event, select which countries to exclude from triggering retro in the
    Processing Configuration
     column.
    If you change back the setting to include the event, Workday considers that event for prior periods where you didn't run retro for the workers. Example: In January, you exclude the
    Transfer Employee
     event from triggering retro. In February, you transfer Janet effective in January. That transfer doesn't trigger retro. In March, you change the setting to include the event. When you run retro, Workday recalculates her pay to consider the transfer in January.
    Security:
    Set Up: Payroll
     domain in the Core Payroll functional area.
  7. (Optional) Access the
    Retro Calculation Processing Configuration
     task.
    This enables you to not process retro before an effective date for these scenarios:
    • Supported retro event for completed periods (except retro leave of absence, retro hire, and retro termination) without on-cycle or on-demand replacement results.
    • Supported retro for the worker’s additional job for a completed period without on-cycle or on-demand replacement results.
    • Supported retro for the worker's non-regular run category for a completed period without on-cycle or on-demand replacement results.
    Once you select a country and an effective date, Workday won't calculate retro differences for these scenarios for pay periods before that date. This avoids double payments if workers receive supported retro entries back to periods with unprocessed (but resolved) retro.
    Before removing or modifying the effective date you initially set, ensure there is no retro in progress.
    Security:
    Set Up: Payroll
     domain in the Core Payroll functional area.
  8. (Optional for Payroll for Australia) Access the
    Maintain Retro Event Categories
     task.
    To enable retro processing for work schedule calendar changes:
    • On the
      Other Data Change
       row, select
      Assign Work Schedule
       on the
      Includes Payroll Event Types
       column.
    • Select
      Australia
       on the
      Country
       column.
To change the retro setting of a pay component, add a new effective date.
For Payroll for Ireland and the UK, if you currently support future dated retro hires, we recommend you edit any relevant run categories to use this setup:
  • Create a tenanted calculation that determines if the worker hire date is less than or equal to a certain date of the month, based on your business needs. Example: Worker: Hire Date <= 19th of the Month.
  • Access the
    Create Run Category
     or
    Edit Run Category
     task.
  • On the
    Workers To Process grid
    , configure the Active Status row as follows:
    • Add the new hire date condition.
    • Add the Workday delivered calculation
      Retro Pay Calculation
       as an OR statement. This is a Workday delivered value comparison calculation that specifies that the worker should be picked up by retro pay calculation