Reverse a correction payment

When you have made a change to an employees pay in a previous pay run, this can result in a correction payment showing e in the current pay run.

You cannot remove the correction as the details still have to be sent to Revenue. If this payment is not required, you will need to reverse it. To do this, you create a negative payment for the same amount.

When to reverse a correction payment

You will need to so this when you have corrected a completed pay run for an employee in a previous pay period, resulting in their pay being increased, and you paid the employee the increased amount in that pay period.

For example

Your employee, Alex, received their usual pay in month 1.

After you complete the pay run, you discover a missing overtime payment for Alex that you need to add.

You edit the month 1 pay run to include the overtime and provide Alex with a new payslip.

Alex receives the correct pay (including the overtime).

In month 2, you reverse the correction as you have already paid Alex the correct amount.

How to reverse a correction payment

  1. Process your pay run up to the Edit stage.
  2. Choose Add New Payment then Add a New Payment.

  3. Choose Expenses as the payment category, and Business Expenses as the deduction type.

    This is to make sure that the payment is not subject to tax, PRSI and USC.

  4. Enter a name and description for the payment, such as Manual correction reversal.
  5. Make the value as the same amount as the Correction payment, but make it a negative amount, so that it reverses the Correction.

Adjust the journal sent to Accounting

If you also subscribe to Accounting and automatically send salary journals from Payroll, reversing the correction payment will also create a difference with your salary journal.

  • The totals in your payroll
  • The totals posted to your accounts.

This difference is equal to the correction amount.

To check what’s been posted to your accounts, check the salary journals.

  1. Go to the Journals tab, select Journals, then New Journal.
  2. Enter a journal entry for the correction value:
    LedgerVATDebitCredit
    Bank (1200 or the default for Payroll postings)Unchecked Value
    Employee costs / Employee wages and salaries (usually 7000)UncheckedValue
  1. Use the date of the corrected pay run, and choose No VAT.