Sometimes you need to make changes after processing a pay run. An adjustment pay (also called an "extra pay") allows you to process additional payments for a completed pay period without affecting the original pay run or creating tax and superannuation calculation issues.
What is an adjustment pay?
An adjustment pay is a supplementary pay run for a period that's already been processed. It allows you to include missed items or corrections while maintaining accurate tax and superannuation calculations.
When you create an adjustment pay, PaySauce calculates tax, superannuation, and other components as if the additional items were part of the original pay run. However, you only pay the incremental difference to employees.
When to use an adjustment pay
Create an adjustment pay when you need to include:
Late timesheets: Timesheets submitted after the original pay run was processed
Missed leave requests: Leave that should have been paid but wasn't included
Forgotten reimbursements: Approved reimbursements that were overlooked
Omitted allowances: Allowances that should have been paid
Additional earnings: Bonuses or other payments that weren't in the original pay run
Corrections: Fixing errors where an employee was underpaid
When not to use an adjustment pay
Don't use an adjustment pay for:
Overpayments: If you overpaid an employee, handle this through deductions in the next regular pay run or discuss repayment options with the employee
Next period's pay: Use the regular pay run for the current period instead
Major corrections requiring reversals: Contact PaySauce support for guidance on significant errors
Creating an adjustment pay
To create an adjustment pay:
Select Payroll from the navigation menu
Go to Previous pay runs
Select the completed pay run you need to adjust
Select Create extra pay for this period
A new pay run is created with the same pay period dates as the original
Completing an adjustment pay
Once you've created the adjustment pay, complete it like a regular pay run:
Select employees to include: Only select employees who need adjustments
Unselect any employees who don't need additional payments
Add the missing information:
Add and approve any missed timesheets
Add and approve any missed leave requests
Add any missing allowances, deductions, or reimbursements
Review employee pay details: Check that only the additional items appear
Verify calculations: Ensure the amounts are correct
Process the pay run: Select Process Pay Run and confirm
How adjustment pays are calculated
Tax calculation
Tax for the adjustment pay is calculated as if the additional hours or earnings were included in the original pay run. This ensures the employee's overall tax for the period is correct.
Example:
Original pay: $1,000 gross, $200 tax withheld
Adjustment pay: $200 additional gross
Tax calculated on combined $1,200, then adjusted for the $200 already withheld
Employee receives: $200 gross minus the additional tax owed
Superannuation calculation
Superannuation is calculated the same way—as if the additional earnings were part of the original pay. The super contribution is based on the combined total.
Net pay
The employee receives only the incremental amount:
Additional gross pay
Minus any additional tax owed
Plus any reimbursements
Minus any deductions
What employees see
When you process an adjustment pay:
Employees receive a separate payslip for the adjustment
The payslip clearly shows it's for the same pay period as the original
Employees receive the additional payment to their bank account
Leave balances are updated if additional leave was included
Filing and compliance
When you process an adjustment pay:
Single Touch Payroll (STP): An updated STP report is filed with the ATO showing the adjustment
Superannuation: An updated superannuation file is submitted showing the additional contribution
Records: Both the original and adjustment pay runs remain in your records for audit purposes
Multiple adjustments
You can create multiple adjustment pays for the same period if needed. Each adjustment is processed separately and filed appropriately with the ATO and superannuation funds.
Note: If you find yourself creating multiple adjustments regularly, it may indicate a process issue that should be addressed.
Common Questions
I created an adjustment pay but included the wrong employees
I created an adjustment pay but included the wrong employees
If you haven't processed the adjustment pay yet, simply unselect the employees who don't need adjustments. If you've already processed it, you may need to create another adjustment to correct the error.
The tax calculation looks wrong on the adjustment pay
The tax calculation looks wrong on the adjustment pay
Remember that tax is calculated on the combined total (original pay plus adjustment) and then adjusted for what was already withheld. This can make the tax on the adjustment appear higher or lower than expected, but the overall tax for the period will be correct.
Can I adjust a pay run from several months ago?
Can I adjust a pay run from several months ago?
Yes, you can create an adjustment pay for any previous pay period in the same financial year. However, be aware that this may affect the employee's year-to-date figures and could have implications for their tax return if the adjustment crosses financial years.
The employee received the adjustment but their payslip doesn't show it
The employee received the adjustment but their payslip doesn't show it
Check that the employee is viewing the correct payslip. They should have two payslips for that period, the original and the adjustment. Both will appear in their payslip list.
Should I tell the employee about the adjustment before processing?
Should I tell the employee about the adjustment before processing?
Yes, it's good practice to let the employee know they'll be receiving an additional payment and why. This avoids confusion when they see an unexpected deposit or receive a second payslip for the same period.
Best practices
To minimise the need for adjustment pays:
Set clear deadlines: Establish cut-off times for timesheet and leave request submissions
Review thoroughly: Take time to review all employee details before processing the original pay run
Communicate: Remind employees of submission deadlines before each pay run
Check approvals: Ensure all pending approvals are addressed before processing
Use checklists: Create a pre-processing checklist to catch common omissions