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Handling Prior Year Arrears

in Payroll and Global Payroll Interface (GPI) 2 comments

Summary:

Handling Prior Year Arrears for pretax deductions that cross calendar years and are no longer pre-tax but should be after-tax deductions.

Content (please ensure you mask any confidential information):

Hello Payroll Experts - I'm wondering how you handle pretax arrears that cross calendar years in Oracle. It is my understanding that any arrears for pretax deductions such as Health Insurance that are for 2023 arrears that have not been collected and flow into 2024 need to be now treated as after-tax deductions because the employee no longer receives the tax benefits from those pre-tax deductions.

We tried to solve for this by building new Prior Year voluntary deductions and doing a balance adjustment to move the previous year's arrears into the new after-tax "bucket".

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