Introduction:
While executing the Calculate Payroll flow, the payroll team encountered a case of double net pay for an employee. This discrepancy became more evident during the Calculate Prepayments flow, where the net pay values did not match with the numbers in Calculate Payroll. The root cause traced back to overlapping entries across different Tax Reporting Units (TRUs).
Problem / Requirement:
The issue occurred due to a change in the Tax Reporting Unit (TRU) for an employee on 17th July 2024. A retroactive housing allowance entry remained assigned to the old TRU, generating a negative amount that was carried forward. This resulted in:
- Two net pay entries in Calculate Payroll—one from the old TRU and one from the new TRU.
- Calculate Prepayments picking only the new TRU’s net pay.
- A mismatch between the two processes, as the system does not consolidate net pay across different TRUs.
This caused confusion and incorrect net payment outcomes in the payroll process.
Solution Implemented:
Before arriving at the final solution, we explored the following alternatives:
- QuickPay Exclusion:
Ran QuickPay while excluding the housing allowance retroactive element from the old TRU. However, this conflicted with the business process, which mandates using Calculate Payroll for processing. - Element Object Group Filtering:
Proposed creating an Element Object Group to exclude the problematic element. While technically feasible, the business required all element entries for the reported employee to be processed, thus this workaround was not applicable. - Event Notification – Approval Status Update:
Considered using event notification to change the Approval Status of the retroactive entry to Deferred. While this would temporarily prevent the entry from being processed, it was not a permanent solution, as the same entry would be retriggered in future payroll runs, causing the issue to reappear.
Since these alternatives did not satisfy business requirements, the final resolution implemented was:
- Created a positive retroactive housing allowance entry as of 1st January 2025 to offset the negative entry from the old TRU.
- Ran the QuickPay process to process both entries. (Negative from the old TRU and positive from the new entry).
- Marked both positive and negative payments as Externally Paid to neutralize the effect of the old TRU’s retroactive entry.
- Continued with regular QuickPay for the remaining payroll elements.
- Reran the Prepayment flow to ensure no residual effects.
- Ran the Archive Periodic Payroll Results and Make EFT Payment processes to confirm the corrected payment flow.
This approach eliminated the mismatch and did not require any manual journal entries (JVs).
Outcome / Impact:
- The EFT payment reflected the correct payable amount.
- The costing report and employee payslip were accurate and matched expectations.
- The final resolution adhered to business process standards while resolving the technical mismatch effectively.
Conclusion / Tip:
When retroactive elements span across a TRU change, ensure that proper offsetting entries are used within the correct TRUs. Always verify Net pay amount in Calculate Payroll, Prepayment, and Archive flows to ensure alignment before EFT execution. If you have any other suggestion or solutions to this issue or encountered such issue in the past, please feel free to share your experience.
