Year-end Payroll Tips – IT0221 Payroll Results Adjustments
Over the last two months, the topic of info type 0221 (Payroll Results Adjustment) has come up multiple times in conversations with customers. So I thought this was a good time to write a blog about my experience with this infotype.
Infotype 0221 is used to adjust an employee’s payroll results, either as a correction or to update the payroll results for items paid outside of the system (such as gifts given to employees which are taxable to the employee). Even if you don’t use this infotype during the year, it is sure to be used at year-end.
During the year, when entering an IT0221, I use the subtype ADJT to adjust an employee’s payroll result. The subtype ADJT will not calculate taxes. It will adjust their results based on what you enter in the infotype. If you leave the subtype blank, the system will calculate taxes for you. The reason I only use the subtype ADJT is because I want to control the adjustment being entered in the system, including the taxes.
SpinifexIT solutions can help you keep track of the IT0221s entered and processed.Once the infotype in updated, there are two ways of running the adjustment. The first one is using the Off-Cycle Workbench and running the Reason 0098 (Distribution Payment Adjustment NAMC). The second way is for the adjustment to be picked up with the next payroll. My preferred method is to run the Off Cycle. I always want to validate the results of the payroll run prior to saving the results.
You can continue to use the subtype ADJT until just before running the first payroll of the following year. Once payroll results for the new year exist (but the W-2s have yet to be run for the prior year), you will then be using the Adjustment Workbench. You have two options on the Adjustment Workbench, with tax calculation (creates subtype YAWA) or without tax calculations (creates subtype YANA). I typically use the subtype YANA (without the tax calculation) because I want to control the tax amounts being entered. Once the adjustment is entered, you can run the payroll right from the Adjustment Workbench.
Once the W-2s are created, any adjustment to an employee’s results for a prior year will require the creation of a W-2c. In this instance, I use IT0221 subtype ADJT with a 12/31 date in the prior year. By doing so, the adjustment should be picked up with the employee’s next payroll. This will create a retrocalculation to the prior year, adjusting the employee’s results for the prior year and marking the employee for a W-2c.
SpinifexIT solutions can help you keep track of the IT0221s entered and processed. With our Easy Balance solution we deliver an IT0221 Reconciliation report. This report displays all the Payroll Adjustments that have been entered for a specified period of time. For subtypes YANA and YAWA, it also shows if the payroll run has taken place (using the status field on the infotype).