About contra transactions

The best way to adjust for an incorrect payment made or where part of a transaction is incorrect (such as leave hours) is to create what is known as a contra transaction.

A contra transaction is where you completely reverse a transaction as it was processed, then reprocess it for what it should have been. You can do this via a pay adjustment in Affinity.

Why we use contra transactions

This type of adjustment encourages good record-keeping, which you'll be thankful for during your next payroll audit. There's a clear reversal record along with a record of the correct entries that should have been processed.

Examples

Example 1

Joe, who is salaried, was paid 0.5 units on 31/07/2023 for 4 leave hours taken and his payment for the day was $200. Although the units and payments are correct for that day, the record of how many leave hours Joe took is incorrect. In reality, Joe should have been paid 0.5 units on 31/07/2023 for 5 leave hours taken, with a payment of $200.

To set the record straight, ceate a pay adjustment that contains two transactions:

One that completely reverses the transaction that was paid.
One that contains the correct details.

As Joe is salaried, you also need to adjust the ordinary hours because 4 hours instead of 5 would have been auto-reduced from his ordinary.

Example 2

Nebal was paid 0.5 units on 31/07/2023 for 4 leave hours taken and her payment was for that part of the day was $100. The units, leave hours and payment are incorrect. Nebal should have been paid 0.75 units on 31/07/2023 for 6 leave hours taken, with a payment of $150.

Your first instinct might be to create a variance pay adjustment that contains only one transaction: 0.25 units for 2 hours of leave taken and a payment value of $50. But you would be wrong. The best method is to create a pay adjustment that contains two transactions, as in example 1.

Example 3

Awhina was paid 1.0 unit on 31/07/2023 for 4 leave hours taken and her payment for that part of the day was $250. The leave hours and payment are incorrect. Awhina should have been paid 1.0 unit on 31/07/2023 for 6 leave hours taken, with a payment of $230.

You might be tempted to create a variance pay adjustment that contains only one transaction: 0.00001 units for 2 hours of leave taken and a payment value of -$20. Have I taught you nothing? The best way is to create a pay adjustment that contains two transactions, as in example 1.