How to Pay an Employee Advance in 7shifts Payroll

This article explains how to process an employee advance payment using 7shifts Payroll and how to manage the repayment.

Scenario: An employee requires an advance on their upcoming wages.

What to Do: 

1. Run an Off-Cycle Payroll to provide a one-time payment to the employee.
2. Use a Post-Tax Deduction to recoup the advance amount.

Steps to Pay an Advance using 7shifts Payroll:

1. Create an Off-Cycle Payroll:
   • Follow the steps outlined in this article to run an off-cycle payroll.
   • Enter the advance amount as the employee's net pay for this off-cycle run.
     
2. Recoup the Advance Using a Post-Dax Deduction:
   • To recover the advanced funds from the employee's future paychecks, you'll need to create a post-tax deduction.
   • Using a deduction will help to ensure that the employee's gross pay and taxes are not effected by the repayment of the advance.
   • Follow the steps in this article create a post-tax deduction.
     • One-Time Deduction: If you want to recoup the funds in a single payment, create a one-time deduction for the full advance amount.
     • Recurring Deduction: If you prefer to recover the funds in installments, create a recurring deduction.
       • Set the deduction amount for each pay period.
       • Specify the total amount to be deducted (the original advance amount). 7shifts will automatically stop the deduction once the total amount has been recovered.
3. Run Regular Payroll:
   • When you run your regular payroll, the post-tax deduction will be automatically applied.
   • You can verify the deduction in the "Post-Tax Deductions" tab of the payroll preview/edit screen.
   • The deduction will be subtracted from the employee's net pay, effectively recouping the advance.