Concept: Retro Differences from Current Tax Authority Change (CAN, USA)
When you make changes to a worker's tax authority in a current pay period and have a supported retro event back to a previous tax authority, Workday:
- Calculates retro differences for earnings and deductions and forwards it to the current pay period.
- Displays Source Tax Authorities that includes the Work and Resident tax authority details from each individual payroll result processed by retro, on the retro worker result.
Example
Due to work relocation, Tara has changes to the tax authority:
- In January 2022, the work location is New York.
- The work location changed from New York to California with an effective date of February 1, 2022. The location change has an effective date that falls in the current period of February 1, 2022 and isn't retroactive.
As a payroll administrator, you run pay calculation and complete for January and February.
In March 2022; worker's current work location is California. You enter a supported event dating back to January, where the tax authority is different from the current. You add payroll input for workers (supported event) to include a:
- Bonus of $1000 for January.
- Commission of $2000 for February
Retro Pay Calculation
and view the payroll retro worker results. Workday calculates earnings and deductions differences and displays Source Tax Authorities for each Retro Result:
- Bonus for New York, prior location.
- Commission for California, current location.
You can use:
- On-cycle payroll for March to pay the retro differences from California.
- On-demand additional payments for March to pay the retro differences from New York.