Pay run corrections

Summary

How pay run corrections happen in Sage Payroll.

Description

When you submit payroll details to HMRC, this confirms the amount paid to your employees that pay run. When you change a completed pay run, it can cause a correction on the active pay run.

Here we explain more about what creates these corrections and how to check that it's correct.

Resolution

What creates a correction

You'll see a correction on your current pay run when you:

Change the amount paid to an employee
Add an absence for a previous period
Add a pension with a staging date in a previous pay run

The change could result in a payment or a deduction on your current pay run. A payment means you increased your employee's pay. A deduction happens when you reduce an employee's pay.

Find the cause of a correction

We recommend that you keep saved copies of your reports to compare the employees’ net pay. It helps find the period that changed.

When you save a report, it doesn't update when changes happen to a pay run. When you run the report again, it will show the updated amounts.

We recommend you export and save a copy of each report listed below when you complete each pay run:

Detailed report
Payslip summary
Employee net pay

▼Use saved copies of my reports

In the example below we’ll use the detailed report. This shows payments, deductions and Employee Net Pay.

Open the saved report you have for the most recent pay period.
Re-run the report for the same period by selecting Pay Runs then select the pay run you want to report on.
Select Open the detailed report.
Compare the net pay on both copies of your reports.

If the net pay doesn’t match exactly, this is the period where the change happened.

NOTE: You may need to compare the reports for each period until you find the difference.

You can find a list of other payslip and employee net pay reports below.

Report name	How to run this report
Detailed report	Select Pay Runs then on the right side of the screen select the pay run you want to report on. Towards the top left corner of the screen select open the detailed report.
Payslip Summary	Select Reporting then Payslip Summary. Use the drop-downs to select the correct Tax Year, Frequency and Period you want to re-run. Select Generate. You can create a PDF copy of the report by selecting Export then PDF.
Employee Net Pay	Select Reporting then Employee Net Pay. Use the drop-downs to select the correct Tax Year, Frequency and Period you want to re-run. Select Generate. You can create a PDF copy of the report by selecting Export then PDF.

▼Don't have saved reports

If you can’t find copies of your needed reports, you can use the FPS to find the information you need.

To see the values from the FPS, you’ll need to view it as an .xml file.

To do this:

Select Pay Runs then select the pay run you want to check.
In the HMRC Real Time Information (RTI) Scheme section select View FPS then Download XML.

This saves to your downloads folder with a name that reflects the period. For example: FPS-2021-2022-Month2.xml.

If you're using Windows, open the file using Internet Explorer or Edge.
Find the employee. Select Ctrl+F on your keyboard. Enter the employee's surname into the Find box.

The employee name highlights.
Compare the amount in the <TaxablePay> field to your employee's payslip.

We recommend comparing the <TaxablePay> field as the FPS doesn't include employee Net Pay.

In the example above, the taxable pay on the FPS.xml is 1500. The value on the employee's is 1200 gross. This means you reduced the employee's salary by 300. The payroll was first completed before this happened.

As the salary is a gross payment (subject to tax and NI), the correction is only 192. The payroll allows for the tax and NI calculation.

How corrections affect the P32 report

The values on your P32 report generate when you send your Full Payment Submission (FPS) to HMRC.

If you correct a completed pay run, the corrections don't affect the P32 totals this period.

The changes will only affect the liability values for the next P32 period.

What to do if you see a correction

The steps you need to take depend on what your employee actually received.

Check your bank transactions. Confirm if you paid the corrected amount to the employee or whether you need to correct pay in this pay run.

▼The employee received the corrected amount

There may be times when you need to reverse a correction. For example, if the employee has already received the correct payment. Or if you edited a previous pay run and need to change it back.

You must then add a business expense or net deduction. We call this reversing a correction. Entering the pay in this way ensures the reversal isn’t subject to tax and NI.

▼The employee received the wrong amount

If the employee received the wrong pay, the correction shows in the current pay run.

Payroll adds the correction for you, to ensure the employee gets the right Net pay this period.

There are no corrections showing, but an employee's pay is incorrect

If the values you've processed aren’t correct and need to change after you've completed a pay run, edit the previous pay run. This will result in a correction appearing in the current pay run.

Read more about how to edit a completed pay run.

Next steps

Once you have made the correction on your pay run, you may need to update other systems.

▼RTI submissions

Full Payment Submission (FPS)

If you have made a correction to a pay run, a corrected FPS transmits to HMRC as part of the process. It updates all the year-to-date values at HMRC.

Employer Payment Summary (EPS)

You can only submit an EPS from the 20th of the current month until the 19th of the following month. For example, make the Month 1 submissions between the 20 of April and the 19 of May.

The next submission will include any changes as the EPS is cumulative.

▼Pension submissions

Nest Pensions

You may make a payroll change after you've uploaded your submission files to NEST. You must download a corrected pension file and upload it to NEST.

The corrected file shows the updated values, including any corrections.

Smart Pensions

You can't resubmit pension contribution details to Smart Pensions.

You may have made a change to your pay run after you've submitted to Smart Pensions. The system includes the difference between the original and corrected pension next submission.

The People's pension

Your next submission will respresent any changes. The system highlights the figure in blue to show it includes a correction.

▼Integration with Accounting

You may have set up the Integration with Accounting. You’ll need to correct the discrepancy in your accounts.

To find out how to do this, read:

How to reverse a correction deduction

How to reverse a correction payment

▼Online payslips

You may make a correction before you publish your online payslips. The corrected payslip will publish automatically on the normal publish date.

If the publish date has passed, then republish any payslips that have changed.

To republish payslips

From the Summary tab, select Publish Payslips.
A warning icon displays along with the following message:

You need to publish X corrected payslip(s). Doing this might also publish updated P60s if the corrections relate to earlier tax years.
Your corrected payslips upload, overwriting the existing ones.