Reverse incorrect payments

A reversal deletes all entries that were recorded for amounts when an incorrect payment was processed. Reversals do not stop payments and they should only be entered in Powerpay after you have placed a stop payment on the incorrect payment.

Typically, reversals are done in the following scenarios:

  • The amount paid to an employee on the previous payroll was incorrect. In this case, the original cheque must be reversed, and then a manual cheque is written for the correct amount.
  • You need to make an adjustment in amounts. For example, if union dues were deducted instead of a contribution to charity, the amount of the cheque may be the same, but you must reverse those fields to adjust your current accounting totals and general ledger (GL). In this case, there is no need to recover the cheque or place a stop payment. This situation could be corrected as a year-to-date adjustment if the delay will not adversely affect your accounting.

Use the Reversal pageClosed. From the Payroll menu, select Adjustments > Reversal. to reverse all the hours, earnings, deductions, and contributions used to calculate the amount of a cheque that was issued to an employee.

This correction ensures that:

  • Year-to-date values for all items are updated. This is particularly significant for items that affect Tax Forms (T4s, RL-1s, T4As, RL-2s).
  • All earnings are in the system to create an accurate ROE
  • The employer portion of CPP/QPP and EI (and QPIP if applicable) remittances are adjusted automatically.
  • Remittances can be made to CRA or Revenu Québec, if Dayforce remits on your behalf.
  • If the employee is accruing vacation pay, the employee's vacation accumulator is adjusted.
  • If the employee's Province of Employment is one that imposes a payroll tax, Powerpay calculates the payroll tax on the employee's earnings and taxable benefits, if applicable.
  • All of these totals are incorporated into the current totals that Powerpay displays on payroll preview pages and in final reports.

Note: The values you enter for a reversal must be exact opposites ofmanual cheque must mirror the values used to calculate the original cheque. If the original amount was a positive amount, enter the amount as a negative amount (with a minus sign in front of the value) on this page. Conversely, if the original amount was a negative amount, enter the amount as a positive amount (with a plus sign in front of the value) on this page.If there are any differences, they will have to be examined and corrected.

Enter only dollar amounts for earnings and deductions. For example, if a deduction that is normally calculated as 4 percent of gross pay, calculate the dollar amount that represents 4 percent and enter the negative of that dollar amount. Do not enter "-4" to represent a percentage. The Reversal page is set up so that the dollar amounts balance to zero and no cheque is produced by Powerpay.

If the employee was being paid for hours or earnings with more than one description, or occurring in more than one pay period, enter each item on a different row. If you require more rows, click Save. Powerpay refreshes the page and adds more rows.

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Enter a reversal in Powerpay

Note: If the incorrect payment included a very large amount for income tax, contact your Customer Support Team to discuss correction options.

  1. Put a Stop Payment on the incorrect payment. If the payment was issued by Dayforce, call the toll-free number on the Adjustments - Reversal page. This toll-free number is also available on the first page of your payroll reports. For more information, see Stop payment on an employee's deposit or cheque.
  2. Use both the Payroll Register and the Audit Trail (online) reports on which the original cheque appeared to gather the information you need to enter the Reversal accurately.
    • Use the Payroll Register report to discover the different types of hours and/or earnings amounts, statutory deductions, miscellaneous deductions, contributions, garnishee deductions, and net pay processed on the original cheque.
    • Use the Audit Trail report to identify any possible "exception" situations on the original cheque (for example, if hours or earnings were originally keyed to an exception department, or if hours were keyed to an exception rate).
  3. Click the Pay Period menu and click the Enter button for the pay period you want to work with.
  4. Navigate to the Reversal pageClosed. From the Payroll menu, select Adjustments > Reversal.
  5. Open the Employee List and select the employee whose payment was incorrect.
  6. Enter all hours and earnings used to create the original payment, but enter them as negative numbers (preceded by a minus sign).

    Note: If your reversal includes a bonus payment, contact your Customer Support Team. Extra steps are required to ensure the tax calculated is correct for future bonuses paid using the Bonus Tax Calculation method.

  7. Select the pay period the hours or earnings were originally recorded to in the Select a pay period field.
  8. Enter the remaining amounts used to create the original payment, but enter them as negative numbers (preceded by a minus sign).
  9. (If applicable) Enter garnishment amounts. For additional information, see Enter a one-time garnishment amount.

    Important: Contact your Customer Support Team for assistance with these entries if Dayforce remits on your behalf.

  10. Click Save.

    A message displays indicating if your entry is balanced. If the message indicates that the entry is not balanced, adjust the entries and Save again.