Changing an employee's pay in a completed pay run can result in a correction payment.

This shows in the current pay run.

You can't remove the correction, but you can reverse it.

To do this, you create a net deduction for the same amount.

When to reverse a correction payment

You may have corrected a completed pay run for an employee in a previous pay period. This could have increased their pay. You paid the employee the increased amount in that pay period.

For example:

Your employee, Alex, received their usual pay in month 1.

After you complete the pay run, you discover a missing overtime payment for Alex that you need to add.

You edit the month 1 pay run to include the overtime and provide Alex with a new payslip.

Alex receives the correct pay (including the overtime).

In month 2, the correction is showing. You reverse the correction in month 2 as you have already paid Alex the correct amount.

How to reverse a correction payment

1. Process your pay run up to the Edit Pay stage.
2. Select New Deduction, then Add a New Deduction.
3. Choose Net Deductions as the Deduction Category, and Other Net Deduction as the Deduction Type.
   NOTE:

   This is to make sure the payment is not subject to PAYE, PRSI or USC.

4.  

   Enter a name and description, such as Manual correction reversal.
5. Set the value to the same amount as the correction. This will reverse the correction payment.

Adjust the journal sent to Accounting

You may subscribe to Sage Accounting and post salary journals from Payroll. Reversing the correction payment also creates a difference in your salary journal.

To correct this, you'll need to create a new journal in Accounting:

1. Select the  Adjustments tab, select Journals, then New Journal.
   NOTE:

   In Accounting Start, select Adjustments, then Journals and New Journal.

    
2. Use the same date as the corrected pay run.

3. Enter a journal entry for the correction value to the following ledger accounts:
   
   

   Ledger	VAT	Debit	Credit
   Bank (1200 or the default for Payroll postings)	Unchecked	Value
   Other deductions (usually 7009 or 7050)	Unchecked		Value

4. Make sure you choose No VAT.