How to Pay Out PTO After a Payroll Run in 7shifts

This article outlines the process for paying out Paid Time Off (PTO) to an employee when their regular work hours have already been processed and paid through a standard payroll cycle using 7shifts Payroll.

Issue 

You've already processed and paid an employee for their worked hours, and they subsequently request PTO for the same pay period. You need to adjust their pay to reflect the correct PTO payout and ensure the hours deduct from their PTO policy. Simply adding the PTO hours in an off-cycle payroll can result in double payment, as the system may still include the previously paid worked hours.

Solution 

Run an Off-Cycle Payroll with a One-Time Deduction to Offset Regular Wages. This process prevents double-payment by removing the previously paid regular wages before processing the PTO payout. Follow these steps:

1. Record the PTO:
   • Ensure the employee's PTO request is properly recorded within 7shifts. This will accurately track their time off balance.
   • Learn how to submit time off on behalf of employees here.
2. Initiate an Off-Cycle Payroll:
   • Create an off-cycle payroll specifically for the employee requiring the PTO payout. This allows you to process the payment independently of the regular payroll cycle.
   • Learn how to run an off-cycle payroll here.
3. Address the Duplicated Hours and Apply the One-time deduction:
   • The off-cycle payroll may automatically populate the employee's previously paid worked hours. This is where the adjustment is crucial.
   • Since the employee has already been paid for the hours worked, and you are now paying PTO for a portion of those hours, you will need to create a deduction for the amount of their regular pay.
   • Learn how to create a post-tax deduction here.
4. Resync Payroll:
   • Return to the payroll processing section.
   • "Resync" or refresh the payroll data in the off-cycle payroll you've created. This action will:
     • Apply the deduction to the employee's pay.
     • Populate the PTO into the employee's pay calculations.
5. Review and Submit:
   • Carefully review the off-cycle payroll to ensure the deduction and PTO payout are accurate.
   • Submit the payroll for processing.
6. Verification:
   • After processing, verify that the PTO hours were correctly deducted from the employees PTO balance, and that the employee received the correct PTO pay.