Reverse a correction deduction

A change made in a previous pay run can result in a correction deduction showing in the current pay run.

You cannot remove the correction as the details are still submitted to HMRC. If this deduction is not required, you will need to reverse it. To do this you create a negative deduction for the same amount.

When to reverse a correction deduction

For example:

Your employee Sam received a bonus in month 2. You accidentally include the bonus in month 3 as well, meaning Sam's pay and payslip was not correct.

You edit the completed pay in month 3 to remove the bonus and provide Sam with a new payslip.

In month 4, you reverse the correction as you have already paid Sam the correct amount.

How to reverse a correction

1. Process your pay run up to the Edit stage.
2. Choose New Deduction then Add a New Deduction.
3. Choose Net Deductions as the deduction category. Choose Other Net Deduction as the deduction type.
4. This is to make sure that the deduction is not subject to tax and NI.
5. Enter a name and description. For example, Manual correction reversal.
6. Set the value as the same amount of the deduction. Make it a negative amount, so that it reverses the Correction deduction.

Adjust the journal sent to Sage Accounting

You may subscribe to Sage Accounting and automatically send salary journals from Payroll. Reversing the correction deduction also creates a difference with your salary journal.

To correct this, you'll need to create a new journal in Accounting:

1. Select the  Adjustments tab, select Journals, then New Journal.
    NOTE: In Accounting Start, Select the More tab, select Journals, then New Journal
2. Use the same date as the corrected pay run.

3. Enter a journal entry for the correction value to the following ledger accounts:
   
   

   Ledger	VAT	Debit	Credit
   Bank (1200 or the default for Payroll postings)	Unchecked	Value
   Other deductions (usually 7009 or 7050)	Unchecked		Value

   
   

4. Make sure you choose No VAT.