Backpay helps you correct pay changes that should have started earlier - without reopening historic pay runs.

When you backdate a salary change or a recurring pay element (like an allowance or deduction), the system:

• checks what the employee was paid in the affected closed pay runs

• recalculates what they should have been paid

• calculates the difference

• adds a single, one-off backpay adjustment into the next open / upcoming pay run

Outcome: no spreadsheets, no manual reconciliation, no reopening closed pay runs—just a clear adjustment added to the next payment.
 

Contents

• When Backpay is useful and what you'll see as a result
• How Backpay works
• Example: scenario
• Applying Backpay
• Key rules and expectations
• Limitations
• What happens in complex scenarios
• Summary

When Backpay is useful

Use Backpay when:

• a salary change was agreed earlier but entered late

• an allowance/deduction should have started earlier

• you need to correct underpayments/overpayments without touching past pay runs

• you’re applying a retrospective salary increase

What you’ll see as the result

When Backpay is applied successfully, you’ll see one (or a small number of) new line(s) in the next pay run, for example:

• Backpay Salary (01/08/2025 – 31/10/2025)

• Backpay Car Allowance (date range)

• Backpay Deduction Adjustment (date range)

These lines represent the net difference between what was paid and what should have been paid for the affected period.

How Backpay works

Backpay always follows the same core logic:

• Step 1: Identify the period to correct
  Backpay starts from the effective date of your change (e.g., “effective from 1 Aug”)
• Step 2: Look at closed pay runs in that period
  The system checks closed pay runs that fall within the backpay period
• Step 3: Compare “what happened” vs “what should have happened”
  For each affected pay run, the system compares:

  • original calculation (what the employee was actually paid in that pay run) vs

  • recalculation (what they should have been paid with the updated salary/element)

• Step 4: Calculate the difference
  The difference is calculated per pay run and then totalled

• Step 5: Add one adjustment into the next pay run
  Instead of changing the past, the system adds the total difference as a single adjustment to the next open/next pay run

Outcome: Past pay runs stay closed and auditable; corrections happen cleanly in the next pay run.

Simple worked example

To set the scene and demonstrate what backpay is in the most basic terms, here is an example:

Scenario

• It’s November 2025

• Employee salary is £30,000/year (£2,500/month)

• A salary increase should have applied from 1 Aug 2025

• The updated salary should have been £33,000/year (£2,750/month)

• Underpayment occurred across Aug, Sep, Oct

What Backpay does

For every pay run between the 1st Aug and Nov:

The November pay run gets a Backpay Salary line for £750.

Applying Backpay

Click on each step to learn more:

• Navigate to Company Setup > Pay Elements
• Edit the relevant pay elements (including salary)
• Select Allow backpay

• Save

• Salary backpay is automatically enabled as long as the Backpay feature is active for your organisation

Exceptions

• You can only apply backpay to the latest salary or employee pay element (on or after the effective from date)
• Only the “Amount” type company pay elements can be used for backpay,
• The backpay must be done on an already paid element (you cannot backpay something that hasn’t been paid in a previous pay run)
• Working pattern is not compared if you update the current salary (without changing the amount) e.g. updating the salary of an employee working Mon-Fri to Mon-Weds will result in no backpay (even though the salary has effectively increased) this also applies to all absence payments
• Occupational Pay Scheme changes always use the latest scheme, not the scheme that was active at that point in time
• SSP will not be recalculated when running backpay

What you do

• Edit the employee’s salary record

• Enable Create backpay for salary

• Save

What happens next

• The system calculates the difference across applicable closed pay runs

• Adds a backpay adjustment line to the next pay run

What you do

When creating or editing an employee pay element:

• enable Apply backpay

• Save your changes

What happens next

• The system checks which closed pay runs are impacted

• calculates the difference for that pay element

• adds a one-off adjustment line into the next pay run

Key rules and expectations

Backpay works best when…

• there are closed pay runs covering the period you need to correct
• the item you’re correcting has already been included historically (for salary, it must have been paid; for pay elements there must be a pay run covering the time period)

Backpay is intentionally “tidy”

To keep payslips and payroll reporting clean:

• backpay is posted as an aggregated adjustment
• quantity-based calculations are flattened into a single adjustment line (Quantity = 1, Amount = total difference)

Outcome: your pay run stays readable and easy to explain.

Limitations

To avoid surprises, note the following:

• Only the latest salary or pay element can have backpay applied (from the effective date onwards)
• Only Amount-type Company Pay Elements support backpay
• You can’t backpay an item that has never been paid historically (for salary and “already paid” elements)
• If you change working pattern without changing salary amount, the system won’t create backpay just because the value “effectively” changed
• SSP isn’t recalculated when backpay is run

Occupational pay scheme corrections use the latest scheme rules, not the scheme that was active at the time.

What happens in complex scenarios (eg absence pay)

If salary impacts other derived lines (like absence deductions or occupational sick pay), Backpay may create multiple adjustment lines - because the system corrects the whole set of pay outcomes for those periods.

Outcome: the correction reflects what payroll should have been, not just the headline salary difference.

Summary

Backpay is a safe and clean way to correct the past without changing the past.
It helps you:

• apply backdated salary or pay element changes correctly
• reduce manual calculations and admin time
• keep historic pay runs closed and auditable
• pay employees the right amount in the next run - with statutory recalculations handled automatically