Off-cycle payroll refers to the process of employers issuing paychecks to employees outside of their regular pay cycle.
An off-cycle payroll is processed between regular scheduled paydays. It is typically created to correct missing or incorrect pay on the previous regular scheduled payday, or to pay a bonus.
With Eddy, you can run an off-cycle payroll if you want to pay your team members outside of your regular payroll schedule. You might run an off-cycle payroll for one of the following common reasons:
- Correcting errors in an employee’s regular paycheck, such as incorrect deductions or miscalculated hours from the timesheet
- Termination or resignation pay which demands immediate attention and off-cycle processing
- Missed payroll deadlines due to unforeseen circumstances
- Bonus or incentive payments that are not part of the regular pay cycle
- Commissions or overtime pay which are not calculated within the regular pay cycle
- Salary adjustments during the pay period due to promotions, role changes, or other reasons
- Correcting tax withholdings
- Emergency payments where employees need to receive wages urgently due to financial hardship
Off-cycle payments offer flexibility and convenience, allowing employers to address the above-mentioned payment needs without delay. With off-cycle payments, employees can receive timely compensation for unique situations outside of regular payroll schedules.
How to run an off-cycle payroll with Eddy
To run an off-cycle payroll in Eddy, you must have the payroll admin role for your Eddy account. Start by going to the Payroll tab and look for the Run off-cycle payroll button.
Should benefits and deductions be included?
Typically these are left off because you have already deducted their recurring deductions on their standard check. But, if you need these deducted for a termination check, toggle these on (you can still edit in payroll).
Tax implications for off-cycle payroll
Off-cycle payments may have specific tax implications, so it’s important to accurately calculate and withhold the correct amount of taxes for off-cycle payments. Failure to do so could lead to tax compliance issues. Eddy helps you do this and gives options that can address various tax situations.
For a standard off-cycle payroll (such as something missed on a check or a termination check) you should select your standard payroll frequency.
For bonus payrolls, we recommend using the supplemental tax rate. If you need further information, please reach out to payroll support.
Off-cycle Payroll Dates
The start and end dates can be the same day for a one-time payment (like for a spot bonus), or different dates to reflect a time period (like the start and end of the month for a monthly commission payment).
Select the appropriate date fields for your payroll run and then click the Create payroll button. From there, you will see the standard payroll processing screens.