Skip to main content

How compensation changes affect drafted payrolls

Updating an employee's compensation flows into the next payroll drafted after the change — it does not automatically update payrolls that were already drafted.

Written by Liam Dorpalen-Barry

When you update an employee's compensation, the new rate becomes their default pay going forward. Freedom prefills that default onto each payroll at the moment the payroll is drafted — so a compensation change flows into the next payroll drafted after you save it, but does not automatically rewrite any payroll that was already drafted before the change.

Update an employee's compensation

  1. Open People and click the employee.

  2. On the Compensation card, click "Edit", update the Compensation type, Amount, Rate name, or Workweek hours, then click "Save Changes" and confirm.

Note: Saving a change creates a new rate and retires the previous one, so the employee always has a single current default rate. For full details, see Set an employee's pay.

The change applies to the next payroll drafted

A payroll pulls in each employee's current default pay when that payroll is first drafted. Because your saved change updates the default rate immediately, any payroll drafted after you save picks up the new amount automatically — you don't need to do anything else for future payrolls.

Already-drafted payrolls keep the old amount

A payroll that was already drafted before you changed the compensation was populated with the old rate, and it keeps that amount. Editing compensation on the employee's profile does not reach back and rewrite an open, in-progress payroll. If you want an already-drafted payroll to reflect the new rate, you have two options:

  • Edit the amount directly on that payroll. Open the payroll in the editor and update the employee's earnings for that run by hand. This changes only that one payroll and doesn't affect the saved default.

  • Re-draft the payroll. If your workflow allows it, discarding and re-creating the payroll draft will repopulate it using the current default rate.

Tip: If you're changing pay right around a pay period, update the compensation before the payroll for that period is drafted so the new rate flows in automatically.

Confirm the amount before you approve

Whichever path you take, always review each employee's earnings in the payroll editor before you approve. Checking the amounts at approval time is the reliable way to catch a payroll that was drafted with a now-outdated rate.

Did this answer your question?