Reverse any incorrect payments issued prior to this pay period

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 Ceridian 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 of 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

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.

If an employee is simply short-paid, you may choose to add the missing entries to the payment on the next payroll run rather than reversing the payment. If you elect to do this, be very careful to allocate hours and/or earnings to the correct pay period using the For which pay period? field. This is important as it affects EI History.

Note: You can reverse cheques for the current year using Reverse the record of an incorrect payment from a previous payroll run in the current year.

Note:

To reverse a cheque for a previous year, prior to the production of tax forms, enter the correction on a year-end adjustment run. If tax forms have already been produced an amended tax form must be generated. If it's past the tape filing deadline, contact your Service Delivery Team.

When you reverse a cheque for a previous year, it is your responsibility to notify the government agencies about any overpayment and request a refund and remit amounts that impact Statutory Deductions such as CPP/QPP, Federal and/or Quebec taxes, EI, or payroll taxes.

Videos

Enter a reversal in Powerpay

Tasks

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

  1. Put a Stop Payment on the incorrect payment. If the payment was issued by Ceridian, 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).
  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 Service Delivery Team for assistance with these entries if Ceridian 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.

Note: Reversal entries are typically entered as negative values. If the amount displayed on your register is negative, enter the reversal amount as a positive value.

After reversing a payment, you can choose either to write a manual cheque, see Calculate and write a manual cheque or issue a new cheque for the employee on the next payroll run (possibly an extra payroll run).

Next steps

Before you submit your next payroll, use the Data Verification page.Closed From the Process menu, select Data Verification. to verify data entry in the Reversal Payment Totals section.

The amounts recorded for the adjustments are processed along with the data for the next regular payroll run. All deductions, contributions, and accumulator amounts are adjusted.

Note: When you enter a reversal, Ceridian Canada adjusts tax, CPP/QPP, and EI (and QPIP) remittance totals for CRA or Revenu Québec as part of the next regular payroll's remittances. Your company should not remit or seek restitution for these amounts if Ceridian remits on your behalf.

Important: No pay stub will be produced as a result of a reversal entry.

Field Information

Select the type of hours originally recorded for the cheque being reversed. The list items conform to your company's descriptions of hours types.

Note: If the employee is being paid for different types of hours, enter the hours on different lines.

Enter the opposite number of hours originally recorded for the cheque being reversed to two decimal places (for example, if the original cheque was for 40 hours, you would enter -40.00 here).

If the hours were originally paid out at a rate different from the employee's permanent rate, enter the rate to three decimal places.

Keep in mind that, with standard overtime or other pre-programmed factors, it is not necessary to enter a rate in this field. Powerpay multiplies the employee's rate by the appropriate factor. Enter a rate in this field only if the employee was paid a rate not programmed in Powerpay.

Note: If the employee's permanent rate of pay is changed on the Permanent Rates, Factors, Earnings page.Closed From the Payroll menu, select Regular Payment > Permanent Rates, Factors, Earnings. or the Compensation tab.Closed From the People menu, select People List > Compensation. during the same pay period as a reversal is being entered for that employee, and the reversal must use the employee's former hourly rate of pay, enter that rate in the Exception Rate field. For more information, see "An employee's permanent rate of pay is changed" in Reversal scenarios.

When the Compensation feature is enabled and set up, the Exception Rate field is populated based on the assigned position. If an alternate position is selected, the Exception Rate field populates based on the Exception Rate Update Method of the selected position. However, for Shift Pay Elements with the Processing of Shift Hours option set to Pays hours based on Shift Premium value only, the Exception Rate field is blank. If the Pay Element selected has a permanent rate (Hourly Rate or Daily Rate), the rate for that position will not display and the permanent rate for the Pay Element will display for the Exception Rate. The Exception Rate field is editable. When Compensation functionality is set up and the rate entered is not within the Pay Range set up for the position (either below the minimum or above the maximum), a message displays. If the Pay Range restricts the rate, the rate is not saved.

To cost earnings to a distribution other than the employee's home distribution, select that distribution's code from the list. Your Distribution Summary reflects the earnings to the exception distribution, and your Journal Entry reflects the earnings and company expenses to the exception distribution.

Select the pay period applicable to these hours. This affects the way hours and earnings are allocated for insurance purposes (EI and QPIP, if applicable).

The list contains all previous pay periods, the current pay period, and five future pay periods for the current calendar year. Future year pay periods are not displayed.

Note: This field behaves differently from the For which pay period? field on the Employee Timesheet page.Closed From the Payroll menu, select Regular Payment > Employee Timesheet. and Employee Timesheet - Second Payment page.Closed From the Payroll menu, select Second Payment > Employee Timesheet - Second Payment. It does NOT automatically populate with the current pay period. You must select a pay period from this list to save this page. If the employee was paid for hours worked in more than one pay period, enter the hours on different lines.

(View-only) Displays the amount calculated for the hours entered on each record after you click the Save button. Hours entered are multiplied by the employee's applicable hourly rate of pay (depending on the hours description) and by the appropriate factor and exception rate (if applicable) to calculate this amount. Do not enter any value in this field.

Displays when the Compensation feature is enabled and set up. The Position field includes a list of the positions available to the employee. If work assignments are set up, only the positions assigned on the Work Assignments page display. If work assignments are not set up, all positions set up for the payroll display.

The ID fields display with any custom description set up on the Department/Distribution Setup page.Closed From the Company menu, select Department/Distribution Setup.

If advanced costing is set up, IDs display based on your payroll’s distribution layout.

If advanced costing is not set up, only ID Dept displays.

For payrolls with the compensation feature set up, the ID fields may be linked to a position. When a position is selected, the ID fields associated with that position display as read only. You can enter one-time exceptions for ID fields not associated with a position.

Select the type of dollar-amount earnings originally recorded for the cheque you want to reverse. The list items conform to your company's descriptions of dollar-amount earnings.

Note: If the employee was originally paid for different types of earnings, enter the earnings on different lines.

Enter the opposite of the dollar amount to two decimal places for the earnings originally recorded for this earnings description on the cheque you are reversing. (For example, if the original cheque was calculated for $800 earnings, you would enter -800.00 here.)

To cost earnings to a distribution other than the employee's home distribution, select that distribution's code from the list. Your Distribution Summary reflects the earnings to the exception distribution, and your Journal Entry reflects the earnings and company expenses to the exception distribution.

Select the pay period applicable for these earnings. This affects the way hours and earnings are allocated for insurance purposes (EI and QPIP, if applicable).

The list contains all previous pay periods, the current pay period, and five future pay periods for the current calendar year displayed in descending order Future pay periods are not displayed.

Note: This field behaves differently from the For which pay period? field on the Employee Timesheet page.Closed From the Payroll menu, select Regular Payment > Employee Timesheet. and Employee Timesheet - Second Payment page.Closed From the Payroll menu, select Second Payment > Employee Timesheet - Second Payment. It does NOT automatically populate with the current pay period. You must select a pay period from the list.

If the employee is paid for earnings worked in more than one pay period, enter the earnings on different lines.

Displays when the Compensation feature is enabled and set up. The Position field includes a list of the positions available to the employee. If work assignments are set up, only the positions assigned on the Work Assignments page display. If work assignments are not set up, all positions set up for the payroll display.

Displays when the Compensation feature is enabled and set up. The ID fields associated with the employee’s position are read-only and update automatically if the position is changed. If the ID field does not pertain to the selected position, it is enabled. The ID fields display with any custom description set up on the Department/Distribution Setup page.

Displays the descriptions of Statutory Deductions based on the selected employee's province of employment.

Enter the dollar amount for each applicable deduction.

Displays the descriptions of all available employee deductions other than Statutory Deductions. The list conforms to your company's descriptions of employee deductions.

Enter the opposite of the dollar amount deducted for each applicable deduction (for example, if the original deduction was 10 dollars, enter -10.00 here).

Displays the descriptions of all available contributions the employer makes on the employee's behalf. The list conforms to your company's descriptions of employer contributions.

Enter the opposite of the dollar amount originally contributed for each applicable contribution (for example, if the original contributions was 15 dollars, enter -15.00 here).

If applicable, enter the opposite of the dollar amount to two decimals of any excess deductions calculated with the original cheque (for example, if the excess deduction calculated was minus 15 dollars, enter 15.00 here).

Displays the descriptions of garnishment types (for example, Support, Federal, or Provincial) if a garnishment is set up for the selected employee.

Enter the opposite of the dollar amount originally deducted for any applicable garnishment (for example, if the original contributions was 200 dollars, enter -200.00 here). For additional information, see Enter a one-time garnishment amount.

Enter the opposite of the dollar amount of the employee's net pay (for example, if the original cheque was made out for $763.50, enter -763.50 here).

(View-only) Displays the total amount earned by adding the values in the Calculated Amount column in the Hours section and the values in the Amount column in the Earnings section.

(View-only) Displays the total amount deducted from Gross Pay by adding the values in the Amount columns in the Government Deductions, Employee Deductions, and Garnishment Deductions sections with the value in the Net Pay field.

Validates the detailed timesheet information. When you click Save, Powerpay displays the following additional information:

  • the earnings calculated from each hours entry in the Calculated Amount field
  • the total gross pay in the Gross Pay field — This is the total of all the positive and negative values from the Calculated Amount fields in the Hours matrix as well as all entries from the Amount fields in the Earnings matrix. This amount is highlighted in red.
  • the total deductions in the Total Deductions (including Net Pay) field — This will be the total of all positive and negative Amounts in the Government Deductions, Employee Deductions, and Garnishees matrices plus the Net Pay field. This amount will be highlighted in red.
  • a message regarding whether the data entered is "in balance" and why it isn't, if applicable

If everything is in order [the amount in the Gross Pay field equals the amount in the Total Deductions (including Net Pay) field and no other warning messages appear], the entry is in balance and can be saved.

If there is an issue with the data entered, follow the instructions in the warning message, then click Save again to revalidate the data.

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