In this example, we correct the Week 1 pay run during the Week 4 pay run.

You have a weekly payroll. An employee has a missed overtime payment of €400 in the Week 1 pay run. You are currently in Week 4. Processing is still in progress.

You need to open the completed Week 1 pay run in correction mode to add the missing €400 payment to the employee’s pay. You see the effects of this in Week 2, Week 3 and Week 4 pay runs. The system adds an extra payment or deduction to the employee’s Week 4 payslip.

PAYE calculates cumulatively. The correction to taxable pay in Week 1 causes increases in the values for Taxable Pay (Year to Date) in Week 2 and Week 3.

The overtime amount in Week 1 pushes the employee into the higher PAYE rate band.

In the original calculations in Weeks 2 and 3, the employees’ Standard Rate Cut-Off Amounts exceeded their pay. In the recalculations, it will use this “unused” part of the cut-off amount. The employee is actually liable for less tax in Week 2 and Week 3 figures than was first calculated.

So the correction has had various effects in Weeks 1, 2 and 3.

In Week 4, the employee will receive a corrective payment for €181.50.