This article describes how certain changes in the employee profile during the current month or retroactive changes can affect the payroll.

Changes in the current month

Changes in the Salary tab

If you adjust an employee's salary in the Salary tab of the employee profile, you should then check whether your changes are correctly reflected in the payroll table. This is particularly important if the change takes effect within the month and results in a prorated salary calculation.

Example
Employee Peter Main works full time 40 weekly working hours and has a base salary of €4000.00 per month. Effective 01.06.2024, he receives a salary increase of €1,200.00 per year.

1. step: customise fixed salary 

Follow the instructions in the article on setting up the fixed salary and select the 01.06.2024 as the date.

2. step: Check a change in payroll

Go to Payroll and find your employee Peter Main in the Payroll table > Employees. Review the change and payslip there.

Impact of absences

In payroll, unpaid absences are very important. They may, for example, be relevant for compensation for reduced income (EEL) that is paid electronically. Click the Reporting tab to view and manage communications with authorities and insurance providers relevant to the month in question.

For an overview of unpaid absences, go to the Payroll table > Employees tab and click on the action button with the three dots in the upper right corner to add a column for Unpaid leave.

Retroactive changes

What are retroactive payroll changes?

A retroactive change is a change that can be relevant for payroll in the past, that is, in a payroll period that has already been approved. Since approved payroll cannot be changed, a correction will be made automatically in the following month in most cases. This recalculates the salary and creates new corresponding documents such as payslips for the affected employees in the current accounting month.

Please note:
Personio Payroll users who complete the implementation before 01.06.2024 (before ITSG migration) must store all changes affecting the past in the system no later than the 10th of a month. Any changes made after this date will not be taken into account in the current payroll and will be included in the following month's payroll.

Below, we look at various examples of retroactive changes.

How Personio Payroll processes amendments

Personio Payroll does not reopen billing periods that have already been completed. Instead, the difference between the originally calculated payout amount and the correctly owed payout amount is determined and processed as a correction. Such a correction can have an impact on gross salary, tax deductions, social security contributions and relevant reports such as DEÜV reports, contribution report, income tax registration and income tax certificate. 

When is a retrospective correction necessary?

Retrospective correction is required for the following scenarios, among others: 

• The salary was recorded incorrectly for a previous month.
• An attribute, such as tax class or contribution group code, was incorrect and has already been billed.
• The entry date was entered incorrectly.
• A bonus was forgotten for a previous month.

Changes in the Salary tab

Add a payment

Example
Your employee Peter Main will receive a one-off payment in March 2024 retroactively to January 31, 2024 through a salary adjustment for January. A bonus is to be paid out to them later.

1. step: Add one-time salary

Follow the instructions in the article on setting up one-time compensations and select the 31st of the month as the date. January 2024.

2. step: Check the corrected payslip in the current month

Go to Payroll and find your employee Peter Main in the Payroll table > Employees. Review the change and new payslip there.

Correction of an over payment

Example
In March 2024, your employee Peter Main will receive a salary adjustment retroactively to January 31, 2024 to correct an overpayment. The annual salary defined for him was too high.

1. step: customise base salary

Follow the instructions in the article on setting up the fixed salary and select the 31 January 2024 as the date.

2. step: Check the corrected payslip in the current month

Go to Payroll and find your employee Peter Main in the Payroll table > Employees. Review the change and new payslip there.

Changes to the Personal info tab

Subsequent addition of a health insurance bill 

Example
In February, your employee Peter Main reports a change in his health insurance for the billing month of January.

1. step: customise attributes in the employee profile retroactively

Follow the instructions in the article on retroactive editing of employee attributes and add the new health insurance company with a date of 1 January 2024.

2. step: Check the corrected payslip in the current month

Go to Payroll and find your employee Peter Main in the Payroll table > Employees. Review the change and new payslip there.

Change of health insurer

Example
Your employee Peter Main was mistakenly registered with TK instead of AOK for the last three months.

1. step: Correct health insurance

Adjust health insurance retroactively to Peter Main's payroll attributes. Personio Payroll recalculates the social security contributions for those affected for three months.

2. step: Review and submit corrected contribution report

For this correction, a corrected proof of contributions must usually be submitted both to the previous health insurance company (cancellation) and to the new health insurance company (new amounts). Depending on the health insurance company number, an additional DEÜV update may be required. This type of correction is complex. We recommend that you contact our support team before you start.

Year-round amendments

Retrospective changes may also occur over the turn of the year. For income tax purposes, the inflow principle applies: Payroll tax is calculated at the time when the payment actually accrues to the employee.

Example
In February 2025, your employee Peter Main will receive an additional payment from a commission agreement for the previous year, retroactively to December 31, 2024.

1. step: Add one-time salary

Follow the instructions in the article to set up one-time payments and choose December 31, 2024 as the date.

2. step: Review tax treatment

Since the payment does not flow until 2025, it can no longer be settled as a current subscription in 2024. Instead, Personio Payroll taxes them as another source of income in 2025, which may increase the tax burden. 

Effects on cumulative annual values 

Retrospective amendments refresh the cumulative annual values of the affected employee, including the cumulative gross salary, the cumulative payroll tax, the solidarity surcharge and church tax, as well as the cumulative social security contributions for health, pension, unemployment and nursing care insurance, in each case for employee and employer contributions. These corrected annual values are automatically included in the income tax statement at the end of the year.

Critical restrictions on retrospective changes

In the case of retrospective changes that are only recorded significantly later, for example after the conclusion of a legal dispute, we recommend that you review the following restrictions at an early stage:

• According to previous experience, retrospective amendments in Personio Payroll are only possible up to a certain period of time in the past, usually up to January of the previous year or around 24 months retroactively. Retrospective amendments are technically possible up to 4 years retroactively, which corresponds to the statutory limitation period for subsequent social security claims. In practice, amendments that extend beyond the current tax year require additional steps. For older periods, we recommend that you contact Payroll Support early on.
• According to Section 26 SGB IV, wrongly collected social security contributions that are older than 3 months can no longer be claimed by the employee in certain cases, in particular if the employer is responsible for the delay.
• Interest on arrears or compensation components from a legal dispute is not a standard wage type in Personio Payroll and must be entered as a manual one-off payment. Whether they are subject to social security and tax depends on the legal nature of the payment. If in doubt, we recommend that you clarify this with a wage expert.
• In principle, an payroll run that has already been completed cannot be reopened. Instead, each correction is made using a difference amount or a separate adjustment run.

Effects on notifications

A fix affects the following messages: 

• contribution report: amendments from previous months are automatically included in the current contribution report.
• EEL: If a retroactive change affects an illness period that has already been reported, a correction notice appears in the Reporting tab. There, you decide whether to cancel the original contribution statement.
• ENGLISH: If a correction relates to social security data from a period that has already been reported, Personio Payroll automatically creates and transmits the required updated reports.
• Payroll tax declaration (LStA): If the payroll tax deduction changes as a result of the correction, a corrected income tax return may be required. Check this in the compliance tab.
• Payroll tax certificate (LStB): If the correction concerns an already completed tax year for which the income tax certificate has already been submitted, a separate audit may be required. In this case, we recommend that you contact Payroll Support.