Example: The Retroactive Accounting Process

Note Note

To keep this example simple, deductions for taxes, social insurance and the like are not taken into account.

End of the note.

  1. Retroactive accounting is triggered by a change to master data that affects payroll with retroactive effect. After the payroll has run for payroll period 06, the employee Donna Moore receives an increase in basic pay of USD 500 that is retroactively effective as of payroll period 05 :

  • Old basic pay: USD 3000

  • New basic pay: USD 3500

The associated retroactive change in infotype 0008 Basic Pay triggers retroactive accounting in payroll period 07 for periods 05 and 06.

  1. The system creates new payroll results for the payroll past. The system creates new payroll results for periods 05 (05 in 07) and 06 (06 in 07) in addition to the regular payroll result for payroll period 07 (07 in 07). However, it does not delete the original results of these periods. Instead, it provides them with different status indicators .

Payroll results

FOR

IN

05

06

07

05

3000

   

06

 

3000

 

07

3500

3500

3500

Recalculation differences

500

500

 

  1. The system transfers the recalculation differences to the current payroll.The system transfers the recalculation differences of USD 1000 (500 for payroll period 05 plus 500 for payroll period 06) to current payroll period 07. Therefore, Donna Moore receives a total of USD 4500 in payroll period 07 (USD 3500 in the form of basic pay plus USD 1000 in the form of subsequent clearing from previous months).