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 as you have already paid Alex the correct amount. How to reverse a correction payment - Process your pay run up to the Edit stage.
- Choose New Deduction then Add a New Deduction.
- 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 ISC. - Enter a name and description, such as Manual correction reversal.
- 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 deduction also creates a difference in your salary journal. To correct this, you'll need to create a new journal in Accounting: - Select the Adjustments tab, select Journals, then New Journal.
NOTE: In Accounting Start, Select the More tab, select Journals, then New Journal - Use the same date as the corrected pay run.
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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 | - Make sure you choose No VAT.
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