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Correcting your payroll

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Summary

We all make mistakes and in this simple article we will help you make the corrections needed in Sage Instant Payroll.

Description

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There may be times when you need to make an adjustment to your payroll or correct a mistake. For example, you may have forgotten to pay overtime to an employee, or you've processed an employee using the wrong NI category or tax code.

To put this right you can either:

  • Make the correction in the next pay period. If you decide to make the correction in the next normal pay period, you don't need to make an FPS adjustment. The corrected values are picked up in the normal FPS and you should pay HMRC the value as shown on your P32.


  • Go back and process the pay again correctly. If you've already submitted your full payment submission (FPS), you may also need to submit an FPS adjustment to let HMRC know.

Let's move onto the simple steps you need to take to correct the mistakes.

Resolution

How to correct your payroll

You can use the following options to go back and process your payroll again correctly:

  • Restore - Ideal for when you're moving to a new computer. Restores all your employees data back to how it was at a certain point in time.
  • Recover - Ideal where no back up to restore is available and you need to correct a mistake that affects all or most of your employees.

Once you've corrected the mistake, you then need to submit an FPS as normal. Or, if you've already submitted an FPS for that pay period, you must submit an FPS adjustment.

Correct an employee's pay

1. Print historical payslips

Before you start, make sure you have details of the employee's original payments. This will help you to calculate any adjustments after you make the correction.

To find this information, you can reprint the employees payslip. Read more >

2. Restore or Recover

Use the Restore  or Recover options to remove an employee's payment history, so you can go back and enter the corrected values.

3. Enter the corrected values

  1. Click Pay Employees, then Check pay date.
  2. Enter the original pay date, then click Save pay date.
  3. Click Maintain Employee's pay and enter the corrected values.
    • Deductions, such as NI and tax are recalculated automatically.
  4. Click Save details.
  5. Repeat for each employee.
  6. Click Print this payslip.
  7. Select the relevant payslip layout.
  8. Click Preview Reportthen click Print Payslip.
  9. Click Close Reports.
  10. Click Close Maintain Employees' Pay screen.

4. Submit an FPS or FPS adjustment

If you haven't submitted an FPS for this pay period, submit the FPS as normal.

Or, if you noticed the mistake after you'd already submitted an FPS for this period, you must submit an FPS adjustment. Read more >

5. Adjust net pay and HMRC payments

If your employee's net pay has changed as a result of the correction, you need to make sure that you've paid them the correct amount. You should compare the original payslip with the new payslip.

You should also reprint your P32 report and pay HMRC the new corrected amount. Read more >

Correct personal employee information

If you submit an FPS and an employee's personal details are incorrect, don't worry, you simply must contact HMRC to report this.

  • If the employee's personal details have changed, for example surname or address, then advise your employee to contact HMRC to report the change. You can then enter the correct employee details into their record for submission on your next FPS.
  • If the error relates to the date the employee started working for you, do not change the start date on your next FPS as this results in duplication of the employee's record on HMRC systems. If you need to correct an error of this nature, contact HMRC.

CAUTION: If you enter the details in your software, but don't report the changes to HMRC, the new details don't update on the employee's HMRC record. This may result in a query from HMRC.

Correcting errors in a previous tax year

If you notice a mistake in a previous tax year, how you correct it depends if it's before or after 19 April. Read more >

Correct errors for leavers

To make a correction or adjustment to an employee who has left or is leaving, check the correcting errors for leavers guide

Correct an employer payment summary (EPS)

If you've submitted an EPS with incorrect values, you should submit a new EPS to replace it. Read more >