Retro-active Pay Increases

[KBoyd]

Greetings once again:

I've just been informed that church leadership has approved salary/wage increases for our employees at its February meeting. The increases are retro-active to January 1, 2015. I'm looking for the best method to implement this. From what I see in older posts is that I should post an additional payroll check for the difference. However, I also see that when entering the new salary/wage amount in Maintain List of Employees/Salary History that I have option to make the effective date retro to Jan 1, 2015.

Info you may need: We're on PC+ v 11.55 (online). We pay monthly and both January and February paychecks have been deposited by the employees. We have both hourly and salaried employees.

Here's the questions:
1. Should I post an additional payroll check for the difference? (Will the tax tables compute the W/H correctly as it may assume annual gross pay incorrectly)?
2. Should I add (or duplicate the Salary Item) a new pay item and enter the difference there along with the new salary amount for March in the existing Salary Item?
3. Should I adjust the monthly salary amount in March to include the increase and the retro amount and then reset it to just the new salary amount in April?
4. If I make the new salary amount effective back to Jan 1, 2015, will the Payroll module know enough to auto-adjust for the differential and pay the regular March salary plus the retro amount for the last two months? And will the W/H tables calculate the proper amounts?

KBoyd

[NeilZ]

Here's the questions:
1. Should I post an additional payroll check for the difference? (Will the tax tables compute the W/H correctly as it may assume annual gross pay incorrectly)?

This is the easiest way, and the system will compute the proper tax amount. Just change the gross pay income amount for the supplemental check, and then update it to reflect the new salary amount for the next full check.

2. Should I add (or duplicate the Salary Item) a new pay item and enter the difference there along with the new salary amount for March in the existing Salary Item?

No need to add a new pay item for the base salary, just change the amount for the next full month. (see item 1) You can, however, create a pay item to cover the 'one time' adjustment, if you want, so you can just add the adjustment to the next check so you wouldn't have to change the gross pay item twice. Again, doing it as you listed in item 1 is the easier way to do it, unless you want to reflect the adjustment on the pay stub.

3. Should I adjust the monthly salary amount in March to include the increase and the retro amount and then reset it to just the new salary amount in April?

Again, another way to do the adjustment, saves you from having to cut another check as in item 1, and does not add extra pay items as in item 2.

4. If I make the new salary amount effective back to Jan 1, 2015, will the Payroll module know enough to auto-adjust for the differential and pay the regular March salary plus the retro amount for the last two months? And will the W/H tables calculate the proper amounts?

I think you're confusing the Salary History with the actual pay item. The Salary History is just used to keep a record of salary changes, it does not figure into any calculations at all. The Pay Item is the piece the system uses to calculate checks. This should always reflect the actual gross pay that will be used for the check.

[KBoyd]

Very helpful and thank you for the super prompt reply.

KBoyd