Concept: Retro and Arrears

Helen earns a base pay for the current period of 120. Their pay isn't enough to cover a lower priority deduction, so part of it goes into arrears:

	Current Amount	Amount Taken	Arrears Amount
Base pay	120
Medical deduction	- 100	- 100
Dental deduction	- 24	- 20	- 4

After the pay period is complete, you increase Helen's base pay retroactively to 150. The medical deduction increases to 110, and the dental deduction increases to 25. When you run retro, Workday calculates these differences:

	Current Amount	Amount Taken	Arrears Amount	Retro Difference
Base pay	150			150 - 120 = 30
Medical deduction	- 110	- 100		110 - 100 = - 10
Dental deduction	- 25	- 20	- 4	25 - 20 - 4 = - 1

John is on a biweekly pay schedule. On August 1, they have a qualifying event and wants to waive medical coverage but notifies you only on August 17. John is also on unpaid leave from August 16 to August 31. On August 17, you enter a retro benefit change, and run retro and payroll. John doesn't have any regular pay to cover his deductions in the current pay period. Workday recoups the deductions from the refunded retro amount, and puts the remaining deduction into arrears:

	August 1 - August 15	August 16 - August 31
Base pay	200	Zero
Medical deduction	- 30	30 (retro refund)
Dental deduction	- 20	- 20
Commuter benefit deduction	- 15	- 15
Remaining pay	200 - 30 - 20 - 15 = 135	30 - 20 - 15 = - 5

When you make a retroactive change to a deduction with arrears that results in a negative retro difference, Workday recoups those deductions before recouping other deductions with arrears.

Bob is on a monthly pay schedule. In January, their medical deduction of 100 goes into arrears. You retroactively place Bob on leave beginning January 16. When you run retro in February, Workday calculates a retro difference of -50. Bob returns from leave on February 1. When you run on-cycle payroll for February, Workday attempts to recoup the arrears for the medical deduction first, because it has a negative retro difference. Workday then attempts to recoup other deductions with arrears balances.

Barb's medical deduction of 150 goes into arrears for 2 periods. They then request that you retroactively cancel their medical coverage due to a life event. When you run retro, Workday calculates a -300 retro difference. Barb's base pay for the current period is 50, and they have a dental deduction of 100. Minimum net pay is zero. When you run on-cycle payroll, Workday first resolves current period deductions, and then attempts to recoup deductions with negative retro differences before recouping other deductions with arrears balances.

	Retro Pay Calc	On-Cycle Pay Calc	Amount Available for Deductions / Recouping	Notes
Medical Retro Difference	-300	-300
Base Pay		50	50 - (-300) = 350	Workday adds negative retro difference to net pay.
Dental Deduction		100	350 - 100 = 250	Workday takes dental deduction first.
Medical Arrears Balance	300	300 - 250 = 50	250 - 250 = zero	Workday recoups partial arrears balance.
Net Pay		Zero	Zero

To identify workers with negative retro differences, you can run the

Retro Calculation Processing Report

and its subreports

Retro Results Report

and

Payroll Results Report

.