Payroll Processing Basics
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      Mid Pay Period Employment Changes

      Making employment changes mid-pay period can affect payroll processing. Read more on what happens when a job title, wage, or employment type is updated during an active pay period and what payroll admins need to do to ensure accurate pay.

      What Happens When a Mid-Pay Period Change is Made?

      If an employment change is made before the pay period ends, Gusto’s embedded payroll does not automatically apply the update immediately. Instead:

      • The change will take effect starting the next full pay period.
      • Payroll admins will receive a notification alerting them of the mid-pay period change.
      • Employees will continue to be paid based on their existing job, wage, or employment type until the new pay period begins.

      How This Affects Payroll

      Because payroll follows the existing compensation details until the next pay period, the employee’s paycheck may not reflect the intended pay rate or employment type for the partial period. This can result in:
      ✅ Overpayment or underpayment for the time worked under the new wage.
      ✅ Differences in tax calculations if employment type has changed.

      What Payroll Admins Need to Do

      To ensure accurate pay for the mid-pay period change, admins have two options:

      1. Allow the Change to Apply in the Next Pay Period

      • No action is needed. The update will take effect when the next pay period starts.
      • The employee’s pay will not be adjusted for the partial period before the change took effect.

      2. Process an Off-Cycle Payroll (Recommended if Pay Adjustment is Needed)

      If you want to pay the difference between the change's effective date and the next payroll cycle:

      • Run an off-cycle payroll to issue the adjustment. Check out our help article here!
      • Ensure you review the employee’s pay details before processing.

      Admin Visibility

      When making a mid-pay period employment change, users will see a warning message in the employment change wizard explaining the payroll impact. Check out this help article on how to make an employment change.

      Payroll Overview Screen of Employment Wizard

      Review & Finish Screen of Employment Wizard

      Questions? Please reach out to support@goco.io!