Payroll Adjustments Overview
Payroll adjustments let you add one-off or recurring changes to an employee's payroll -- extra pay, deductions, or corrections -- without modifying their base salary structure. Adjustments are applied during payroll processing and appear as separate line items on payslips.
What Are Payroll Adjustments?
An adjustment is any amount added to or deducted from an employee's regular pay for a specific payroll period. Unlike salary revisions (which change the ongoing CTC), adjustments are targeted changes that apply to one or more payroll runs without permanently altering the employee's compensation.
Common scenarios:
- Paying a performance bonus after a project milestone.
- Reimbursing an employee for a business expense.
- Deducting an advance that was paid out earlier.
- Correcting an overpayment from a previous month.
Types of Adjustments
Adjustments fall into two categories: additions (extra pay) and deductions (amounts withheld).
Additions
| Type | When to Use |
|---|---|
| Bonus | Performance bonuses, spot awards, referral bonuses, festival bonuses |
| Reimbursement | Business expenses, travel costs, equipment purchases the employee paid out-of-pocket |
| Overtime | Extra hours worked beyond the standard schedule |
| Arrears | Back-pay owed from a delayed salary revision or correction |
| Allowance | One-time or recurring allowances not part of the standard salary structure (e.g., internet stipend, relocation allowance) |
| Commission | Sales commissions or variable pay components |
Deductions
| Type | When to Use |
|---|---|
| Advance Repayment | Recovering a salary advance paid to the employee |
| Overpayment Correction | Clawing back an amount that was overpaid in a previous payroll run |
| Loss of Pay (LOP) | Deducting pay for unapproved or excess leave days |
| Equipment Recovery | Recovering the cost of company equipment not returned |
| Loan Repayment | Deducting installments for an employee loan |
| Other Deduction | Any other one-time deduction with a custom description |
When to Use Adjustments
Use adjustments when you need to change an employee's pay for a specific period without updating their salary structure. Here are the key decision points:
- One-time payment or deduction? Use a one-time adjustment.
- Repeating monthly payment? Use a recurring adjustment (e.g., monthly internet allowance).
- Same adjustment for many employees? Use bulk import via CSV.
- Permanent salary change? Use Salary Revisions instead -- that updates the CTC.
How Adjustments Flow into Payroll Runs
Adjustments integrate with your payroll workflow at two points:
1. Before the Payroll Run
You can create adjustments at any time during the month. When a new payroll run is created, Omnivoo automatically pulls in:
- All pending one-time adjustments with an effective date within the payroll period.
- All active recurring adjustments scheduled for that period.
2. During Payroll Preview
While reviewing a payroll run (before approval), you can:
- See all adjustments applied to each employee.
- Add new adjustments directly from the payroll preview screen using the Adjust button.
- Remove or modify adjustments that have not yet been processed.
After the payroll run is approved and processed, adjustments are locked and appear on the employee's payslip.
Adjustments with amounts above your configured threshold require approval before they are included in a payroll run. See Adjustment Approval for details.
Related Guides
- Adding Adjustments -- Step-by-step guide to creating one-time adjustments.
- Recurring Adjustments -- Set up adjustments that repeat automatically.
- Adjustment Templates -- Save time with reusable templates.
- Bulk Import Adjustments -- Upload adjustments for many employees via CSV.
- Adjustment Approval -- Configure and manage approval workflows for adjustments.