Fintra Payroll

Retro Pay With a Paper Trail

A dedicated RETRO earning code - reason required - captures why back pay was owed, taxes it correctly against year-to-date wages, and leaves an auditable record.

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What retro pay handles

Retroactive pay is owed when something was late: a raise applied a period behind, a misclassified rate, an underpayment correction, or negotiated back pay. Fintra treats it as a distinct RETRO earning line that requires a reason, so the adjustment is documented rather than buried inside a generic “other” bucket.

  • RETRO earning code with a mandatory reason field
  • Taxed as current-period wages against the correct year-to-date accumulators
  • Shows as its own line on the pay stub and in the calculation trace
  • Works in a scheduled or off-cycle run
  • Auditable: the reason and amount are recorded, not inferred

How retro is taxed

The other direction: reductions

Retro isn’t always positive. A REDUCTION earning line (which must be negative and carry a reason) handles unpaid time or a salary reduction, applied to gross before tax math - the honest counterpart to back pay.

Inside Fintra

Retro adjustments flow into remittances, the GL export, and year-end wages like any other earnings, so a mid-year correction doesn’t need a separate reconciliation at year-end.

Frequently asked questions

How does Fintra handle retroactive pay?

Through a dedicated RETRO earning code that requires a reason. It’s taxed as current-period wages against year-to-date accumulators and appears as its own line on the stub and trace.

Is retro pay taxed at the time it was earned or paid?

When it’s paid, using current rates, and it adds to the same YTD ledger so wage-base caps and thresholds remain exact.

Can I claw back an overpayment?

Yes - a REDUCTION earning line (negative, reason required) reduces gross before tax math for unpaid time or corrections.

Is the reason for retro pay recorded?

Yes. The RETRO code mandates a reason, so every back-pay adjustment carries a documented justification in the record.

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Back pay, done by the book

Process retro pay with a required reason and cap-exact taxation.

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