Paying 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:
   1. Login to the 7shifts web app as an Admin.
   2. Navigate to Payroll > Run Payroll. 
   3. From the Payroll Dashboard select "Run off-cycle payroll."
   4. Select the payment method you would like to use to pay out the advance (e.g., direct deposit or cheque). 
   5. 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.