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Administrator Guide
Last Updated: 2024-09-20
Steps: Process Retro Differences from Tax Authority Change (USA)

Steps: Process Retro Differences from Tax Authority Change (USA)

You can associate taxes on retro pay with the tax authority in effect during the corresponding retro pay period. Workday:
  • Calculates retro differences for earnings and deductions.
  • Forwards the retro differences to the current pay period.
  • Associates taxes on the retro difference with the tax authorities in effect during the retro pay periods.
  • Calculates taxes on retro pay based on the worker's current tax rates, elections, and rules.
  1. 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 pay periods.
  2. Run a retro pay calculation to generate retro differences.
  3. Review retro results.
  4. Recalculate payroll to pay the retro differences.
    When workers have additional retro events after you calculate their regular payroll, you must recalculate that regular payroll.
    You can view the processed retro differences on the
    Gross to Net
     and
    Additional Pay Components
     tab of the worker's payroll results.
  5. Access the
    Run Retro Pay Complete
     task.
    Complete the retro results for pay groups and pay periods with:
    • No payroll process running for any pay groups.
    • No in-progress on-demand replacement payments.
    • No workers with a retro pay calculation status of
      Requires Recalculation
       or
      Error
      . Correct and recalculate retro as needed for those workers.
    Example: When you complete on-demand additional payments while retro is
    In Progress
    , Workday assigns the
    Requires Recalculation
     status to the retro result.
    Workday marks retro results as
    Complete
     and you can't rerun retro or suspend the results.
  6. Run your final pay calculation and complete it.
    Complete off-cycle payments with retro before completing on-cycle payments for the same period.
Workday resolves the taxes for retro period tax authorities on a single pay result with 1 payroll result line displaying per:
  • Tax for the current period.
  • Tax for each retroactive period that has different applicable tax authorities than the current pay result.