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Sometimes employers need to pay employees or contractors outside the regular schedule of their Pay Schedule. Common reasons for this can include:
  • Bonuses or Commission not paid on the employee’s regular payroll
  • Corrections for underpayment on an employee’s previous Payroll
  • Payments to terminated employees which may require payment on the date of termination
  • Contract payments required outside the normal schedule
To handle these and other scenarios, Nmbr supports creating an off-cycle payroll.

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Configuring an Off-cycle Payroll

Off-Cycle payrolls are more flexible than regular payrolls, but require some information when being created. The payroll requires a valid pay_date:
  • It must not be in the past.
  • It must not be before the current bank-processing time allowed - e.g. if the current processing speed is 4 days, on Monday (January 1st), the earliest pay_date is Friday (January 5th).
To correctly calculate taxes, an off-cycle payroll must have a source_payroll_id. This Source Payroll must conform to the following rules:
  • Be from the same Pay Schedule as the off-cycle payroll.
  • Have a type of regular. It must not be a historical or off-cycle payroll.
  • The pay_date of the off-cycle payroll must be in the same calendar year as the pay_date on the Source Payroll.
You do not define a period_start or period_end on an off-cycle Payroll, as these are inherited form the Source Payroll. Once an off-cycle payroll has been created, it will have no pay stubs as no employees have yet been assigned to it. You can assign an employee to an off-cycle payroll by attaching their work assignment for that pay schedule to that payroll. An employee cannot be paid on an off-cycle if they do not have a work assignment for that pay schedule.
📘 Pay Stub line items After creating a pay stub on an off-cycle payroll, no earning, reimbursement, benefit or deduction line items are automatically created. All line items must be created directly on the pay stub.
📘 Earning line items An off-cycle pay stub is restricted in what types of earning line items it supports. The line items must be non-periodic types - retroactive_payment, commission, bonus_discretionary, bonus_non_discretionary, lump_sum, severance_pay or invoice_payment.
After an off-cycle payroll has been set up, with pay stubs and line items, it may be managed in the same way as a regular payroll.

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Payroll Setup

Start by creating the off-cycle payroll. 
curl --request POST \
     --url https://sandbox.nmbr.co/services/payroll/payrolls \
     --header 'Authorization: Bearer <access_token>' \
     --header 'accept: application/json' \
     --header 'content-type: application/json' \
     --data '{
          "pay_schedule_id": "01J571SB1ZRDW9E47E2WRNNSVM"
          "type": "off_cycle",
          "pay_date": "2024-02-08",
          "source_payroll_id": "01J571RQC6XDPSBNNJKM4A38K2"
     }'
A new off-cycle payroll will be created, you will need to create a pay stub for each employee work assignment that you wish to pay on this payroll. 
curl --request POST \
     --url https://sandbox.nmbr.co/services/payroll/pay_stubs \
     --header 'Authorization: Bearer <access_token>' \
     --header 'accept: application/json' \
     --header 'content-type: application/json' \
     --data '{
          "payroll_id": "01J571ZDJ2X8HTT463VPZ7ER04"
          "work_assignment_id": "01J5720H39AFZVWY5NZ1GYVPAW",
          "note": "Off-cycle payroll note"
     }'

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Running the Off-cycle Payroll

An off-cycle can be approved at any time relative to its source payroll, provided the source payroll is not a future payroll (beyond the next scheduled payroll in the pay schedule). The off-cycle payroll can be approved before or after the source payroll is approved, and paid before or after the source payroll is paid. If an off-cycle payroll is approved before its source payroll, the method in which the statutory withholdings are calculated will be different than if the source payroll has already been approved. See the section on Statutory withholdings for more information.

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Statutory Withholdings

Nmbr supports two methods for calculating statutory withholdings on off-cycles: the Combined Method (used when the source payroll is approved first) and the Standalone Method (used when the off-cycle is approved first).

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Combined Method

Determine the difference between the source statutory withholdings and the combined statutory withholdings, and apply that difference to the off-cycle payroll if applicable.
  • The total taxable remuneration from both the source payroll and the off-cycle payroll are combined.
  • Statutory withholdings are calculated on the combined remuneration.
  • As this is a recalculation which takes into account the regular payroll, any credits or exemptions that apply are taken into account.
  • The statutory withholdings on the off-cycle are the difference between the source statutory withholdings and the combined statutory withholdings.
For example, if an employee receives additional pensionable earnings in an off-cycle payroll, the system will recalculate the total CPP contributions as if the earnings were included in the original payroll. The off-cycle payroll will then withhold only the difference between the new total and the original deductions, preventing over- or under-contributions.

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Standalone Method

When an off-cycle payroll is approved before its source payroll, the standalone method is used to calculate statutory withholdings.
  • Statutory withholdings are calculated only on the taxable remuneration in the off-cycle payroll.
  • Credits and exemptions are not taken into account, as they are expected to be applied in the source payroll’s calculation.
  • When the source payroll is later approved, the off-cycle will be used as year-to-date data.