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FAQ: After expensing payroll at EOFY using Method 2, how do I make a correction if needed?

Complete the steps below for the appropriate type of correction that is needed.  (Tip:  In addition to the resolution steps noted below for each scenario, there is an alternative option available in order to void an employee’s expensed payroll check (that is not yet paid), and then if needed, re-expense the employee with the correct information; to complete the alternative option, contact Customer Support for assistance.)

If a contract was expensed for an employee that should not have been expensed (will not be paid):

  • Enter and post manual journal entries in General Ledger to June to reverse the expensing entries for the salaries for the employee, by doing a CREDIT to the applicable salary expense account(s) and a DEBIT to the applicable Salaries Payable Account.  Also, enter manual journal entries to reverse the expensing entries for the employer share of deductions and taxes for the employee, by doing a CREDIT to the applicable benefit expense account(s) and a DEBIT to the applicable Benefits Payable Account.
  • Update the Expensed Payroll fields on the Wages, Deductions, and Taxes screens in the Employee File to be zero for the employee; you will need to contact Customer Support for assistance to update these fields.  Also, update the employee’s contract on the Wages screen in the Employee File to zero out the Contract Balance field and the Remaining Payments field.
  • After calculating the regular payrolls in July and August to pay the expensed wages, enter and post additional manual journal entries in General Ledger to July and August to correct the expensing entries for the salaries for the employee, by doing a DEBIT to the applicable salary expense account(s) and a CREDIT to the applicable Salaries Payable Account.  Also, enter manual journal entries to correct the expensing entries for the employer share of deductions and taxes for the employee, by doing a DEBIT to the applicable benefit expense account(s) and a CREDIT to the applicable Benefits Payable Account.  (Tip:  During the payroll calculation, warning messages will appear stating the employee has expensed wages but is not getting paid and the expensed deductions and taxes will be reversed but are not being processed; the messages are a reminder to complete the manual journal entries.)

Note:  If the contract should have been expensed for a lesser amount (rather than not expensed at all), complete the same steps above except the manual journal entries would just be for the difference, and the fields in the Employee File (i.e. the Expensed Payroll fields on the Wages, Deductions, and Taxes screens, and also the Contract Balance and Remaining Payments fields on the Wages screen) would need to be updated to the applicable amounts.  If the contract should have been expensed for a greater amount, complete the same steps above except the manual journal entries would use the opposite signs (DEBIT or CREDIT) as noted above and be for only the difference, and the fields in the Employee File (i.e. the Expensed Payroll fields on the Wages, Deductions, and Taxes screens, and also the Contract Balance and Remaining Payments fields on the Wages screen) would need to be updated to the applicable amounts.

If an entry in a Pay Period Entries batch was expensed for a unit employee that should not have been expensed (will not be paid):

  • Enter and post manual journal entries in General Ledger to June to reverse the expensing entries for the salaries for the employee, by doing a CREDIT to the applicable salary expense account(s) and a DEBIT to the applicable Salaries Payable Account.  Also, enter manual journal entries to reverse the expensing entries for the employer share of deductions and taxes for the employee, by doing a CREDIT to the applicable benefit expense account(s) and a DEBIT to the applicable Benefits Payable Account.
  • Update the Expensed Payroll fields on the Wages, Deductions, and Taxes screens in the Employee File to be zero for the employee; you will need to contact Customer Support for assistance to update these fields.
  • Make a negative entry in an additional Pay Period Entries batch for the employee so the employee will not get paid for that entry, and include the batch when calculating the regular payroll in July.
  • After calculating the regular payroll in July to pay the expensed wages, enter and post additional manual journal entries in General Ledger to July to correct the expensing entries for the salaries for the employee, by doing a DEBIT to the applicable salary expense account(s) and a CREDIT to the applicable Salaries Payable Account.  Also, enter manual journal entries to correct the expensing entries for the employer share of deductions and taxes for the employee, by doing a DEBIT to the applicable benefit expense account(s) and a CREDIT to the applicable Benefits Payable Account.  (Tip:  During the payroll calculation, warning messages will appear stating the employee has expensed wages but is not getting paid and the expensed deductions and taxes will be reversed but are not being processed; the messages are a reminder to complete the manual journal entries.)

If a contract was expensed for an employee but now needs to be paid out (pay all remaining payments at once):

  • Assuming the employee has two payments on the contract remaining that had been expensed and need to be paid now, make an entry in a Pay Period Entries batch for one unit for the employee’s contract (as one unit will also be included automatically when selecting the employee’s pay group in the regular payroll for a total of two), and include the batch when calculating the regular payroll in July.
  • After calculating the regular payroll in July, enter and post manual journal entries in General Ledger to July to correct the expensing entries for the salaries for the employee, by doing a CREDIT to the applicable salary expense account(s) and a DEBIT to the applicable Salaries Payable Account.  Also, enter manual journal entries to correct the expensing entries for the employer share of deductions and taxes for the employee, by doing a CREDIT to the applicable benefit expense account(s) and a DEBIT to the applicable Benefits Payable Account.
  • After calculating the regular payroll in August, enter and post additional manual journal entries in General Ledger to August to correct the expensing entries for the salaries for the employee, by doing a DEBIT to the applicable salary expense account(s) and a CREDIT to the applicable Salaries Payable Account.  Also, enter manual journal entries to correct the expensing entries for the employer share of deductions and taxes for the employee, by doing a DEBIT to the applicable benefit expense account(s) and a CREDIT to the applicable Benefits Payable Account.  (Tip:  During the payroll calculation in August, warning messages will appear stating the employee has expensed wages but is not getting paid and the expensed deductions and taxes will be reversed but are not being processed; the messages are a reminder to complete the manual journal entries.)

If a deduction was expensed for the incorrect amount – should have expensed a greater amount:

  • Update the applicable fields for the employee’s deduction on the Deductions screen in the Employee File (or else enter a deduction/tax adjustment, if desired).
  • Update the Expensed Payroll fields on the Deductions screen (and the Taxes screen, if applicable) in the Employee File to be the correct amounts; you will need to contact Customer Support for assistance to update the Expensed Payroll fields.
  • Enter and post manual journal entries in General Ledger to June to correct the expensing entries for the employer share of the deduction (and taxes, if applicable), by doing a DEBIT to the applicable benefit expense account(s) and a CREDIT to the applicable Benefits Payable Account for the difference.
  • After calculating the regular payroll(s) in which the expensed deduction was processed (i.e. in July and August), enter and post additional manual journal entries in General Ledger to the applicable month(s) (i.e. July and August) to correct the expensing entries for the employer share of deductions (and taxes, if applicable), by doing a CREDIT to the applicable benefit expense account(s) and a DEBIT to the applicable Benefits Payable Account for the difference.

If a deduction was expensed for the incorrect amount – should have expensed a lesser amount:

  • Update the applicable fields for the employee’s deduction on the Deductions screen in the Employee File (or else enter a deduction/tax adjustment, if desired).
  • Update the Expensed Payroll fields on the Deductions screen (and the Taxes screen, if applicable) in the Employee File to be the correct amounts; you will need to contact Customer Support for assistance to update the Expensed Payroll fields.
  • Enter and post manual journal entries in General Ledger to June to correct the expensing entries for the employer share of the deduction (and taxes, if applicable), by doing a CREDIT to the applicable benefit expense account(s) and a DEBIT to the applicable Benefits Payable Account for the difference.
  • After calculating the regular payroll(s) in which the expensed deduction was processed (i.e. in July and August), enter and post additional manual journal entries in General Ledger to the applicable month(s) (i.e. July and August) to correct the expensing entries for the employer share of deductions (and taxes, if applicable), by doing a DEBIT to the applicable benefit expense account(s) and a CREDIT to the applicable Benefits Payable Account for the difference.