The Back Pay transaction automatically calculates back pays based on transaction values in the employee’s previous earnings and the percentage or rate increase applied.
Note: For information on Annualised Salaries and Pay Assurance, see Pay Assurance.
Any hours included in Back Pays are excluded from hours worked leave accrual and some reports as the hours have already been accounted for.
Back Pays are calculated for whole periods only. If the start date for the back pay falls mid-period, the back pay will apply to the entire period. Additionally, the Back Pay will only include additions and deductions based on a percentage or rate. To pay partial periods or additions based on amount or units, use Manual Calculation. If you use Manual Calculation for a Back pay, don't enter hours in the Manual Calculation, only enter the value. Entering hours for components such as normal will affect hours worked leave accrual and some reports, overstating them. To calculate the tax based on the employee's average earnings, don't tick Tax in Pay Calculation, instead use the Bonus Calc button in the Manual Calculation.
When Calculation Details are entered, the new rates of pay are calculated for the employee. These display on the Rates tab, and you can update the employee's pay rates with the new values when the Back pay is processed.
You can process Back Pays for terminated employees. Unlike other transaction screens, Back Pay includes all employees. This means that you don't need to unhide terminated employees.
How to process a Back Pay Transaction
Go to Payroll, Processing, Transactions, Back Pay.
When prompted, select Standard Back Pay as the Back Pay Type.
Select the Employee.
For Calculation Detail, select either Percentage or Amount. Use Amount to increase the rate by a dollar amount or Percentage to apply a percentage increase to the rate.
If the Back Pay is not to be paid by EFT, untick Generate Payment.
Select Bypass Bank Splits to transfer the payment into the employee's balance bank account and not split between their accounts.
On the Calculation Details tab, enter the Start Date and End Date. The end date should be the actual pay period end date of the last period paid at the previous rate. The back pay will include all period end date that falls within the date range. If unsure, print the Employee Previous Earnings Report (Payroll, Reports, End of Pay) to check the period end dates for the employee.
Specify the Amount or Percentage for the back pay. The option available depends on what was selected for Calculation Detail.
If Amount, you need to select the unit that the increase applies to. The options are Per Hour, Per Auto Pay or Per Year. For example, if you enter $10 Per Hour, an employee working a 40-hour week would earn $400 in back pay for the week.
To calculate the values, click Calculate or select either the Rates or Transaction Details tabs.
Select the Rates tab and review the new rates.
Tick Apply new rates to employee on process to update the employee record with the new rates. This is available if the employee isn't attached to a pay class.
Select the Transaction Details tab, review the components affected by the Back Pay.
Enter a Back Pay Advice Message, if required.
Click Process or <Ctrl> + <P> to process the Back Pay.
Global Back Pay
If you have groups of employees on the same pay class and all requiring Back Pays, you can use Global Backpay if the back pay period is within the last 12 months. We would recommend using Back Pay rather than Global Backpay, if the back pay relates to payments that are more than 12 months ago, so that the Financial Year is correctly assigned to the Lump Sum E values.
This is in Payroll, Transactions, Processing, Update Pay Rates. Select Global Back Pay and complete the required details.
Use Preview to review the changes that will occur and then Update to create the Back Pay Transactions for the group of Employees. It is recommended that you do a Backup before Global Backpays.