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Late Reported Payments

Updated

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Customers are required to report pay information accurately and on time in order for Justworks to collect and remit funds to proper government agencies by their respective deadlines. Government agencies (including the Internal Revenue Service) often require that Justworks remit any tax liability the business day following the recorded check date. If a payment has already occurred and is reported late, the government agency has the right to levy penalties and interest against any tax underpayment. 

Note: Late reported payment is different from retroactive pay. Retroactive pay should be used when an employee has not received any payment tied to a past date. 

Recording Late Reported Payments

Use the Late Reported Payments pay type in Make a Payment to record manual payments made to an employee outside of Justworks.  Only payments covered by Justworks Customer Service Agreement (dated after your company joined Justworks or the employee’s hire date) should be recorded. 

Record a payment screen showing two options: 'Fringe benefits' and 'Late reported payments,' each with a brief description and a right-arrow navigation link.
 Navigate to Make a Payment and select 'Late reported payments' to record manual payments already made to an employee outside of Justworks.

Once selected, you can choose from three different earning types based on your needs: off-cycle salary,  tips and supplemental pay.

Late reported payments sections showing earnings type options. Off-cycle Salary, Tips, and Supplemental Pay
On the Late reported payments form, select the earnings type that matches the payment already made to the employee — Off-cycle salary, Tips, or Supplemental pay.

If you select off cycle salary or paycheck tips, you will be able to enter basic pay date and pay period information with the option to add a note that is visible to the employee on their paystub.

Only dates within the current calendar year will be considered valid pay dates. If you need to record a payment for a previous year, please contact our Customer Support team for further information.

By default, the payment can be entered as the net pay amount. The net pay is the final value the employee received after accounting for taxes. You can also use the gross pay amount which is the amount before taxes are withheld.

Payment settings form with a Pay date field (mm/dd/yyyy), Applicable work period start and end date fields, a Payment input section with 'Net Pay' selected and 'Gross Pay' unselected, and an optional Additional information Notes text area.
Complete the Payment settings by entering the pay date, the applicable work period, and whether to enter the amount as Net Pay (default) or Gross Pay. An optional Notes field is also available.

 

If supplemental pay is selected, you will be required to specify what type of supplemental pay was issued.

Supplemental pay type section showing six unselected radio button options: Bonus, Commission, Retroactive, Severance, Taxable moving expense, and Other.
If Supplemental pay is selected as the earnings type, choose the specific supplemental pay type that was issued to the employee.

While several standard supplemental pay types are provided, if the supplemental pay type Other is chosen, you will be required to provide further information.

Other is most often used when recording the exercise of equity based compensation such as restricted stock units (RSUs).

Supplemental pay type section with 'Other' selected (highlighted in blue), an informational note reading 'For equity based compensation such as RSUs,' and an 'Other' free-text field with placeholder text 'Add reason.'
Select 'Other' when recording equity-based compensation such as RSUs. A free-text field will appear to specify the reason.

 

Late reported supplemental payments will default to the flat rate calculation. However, if you need to apply the cumulative method for tax calculation, please reach out to our Customer Support team for assistance. 

ederal tax rate section with 'Flat Rate' selected by default, describing IRS rates of 22% for supplemental wages up to 1 million and 37% for supplemental wages cumulatively greater than 1 million, plus an info note: 'For cumulative tax method reach out to Customer Support.'
Late reported supplemental payments default to the Flat Rate for federal tax calculation. Contact Customer Support if the cumulative method is needed instead.

Once your earnings type, payment settings, date information, and amounts have been entered, you can click Continue.

You can enter the applicable amount for the necessary employee(s). A summary of the total number of payees and amount will appear on the right-hand side.

 

Click Continue once all late reported payments have been entered and you will be redirected to a final review screen. 

Prior to submitting the late reported payment, please review the hyperlinked addendum and check the box acknowledging the terms and conditions.

Late reported payments review page showing payment details (Supplemental pay – Commission, pay date Jun 26 2026, Flat Rate federal tax) for payee ($100.00), with a highlighted terms-and-conditions box containing an unchecked checkbox labeled 'I have read and agree to the above terms and conditions' and a greyed-out Submit button.
Before submitting, review all payment details and check the box to agree to the addendum terms and conditions. The Submit button will remain disabled until the checkbox is selected.

Once submitted, you will see a success page giving confirmation the payment is ready to be processed on the next available invoice. This will be the same business day if submitted prior to 2pm Eastern or the next business day.

 

Late reported payments success screen displaying 'This payment has been recorded,' with panels showing tax invoicing info and more
After submitting, the success screen confirms the payment has been recorded and provides key details including the tax invoicing timeline, the deadline to edit or cancel the payment, and the payment summary.

You will still be able to adjust or cancel the late reported payment prior to processing on the Off-cycle Payments tab found on the Pay tab.

Adjust the filter for Pay Date Start to include the original date of the payment rather than the processing date.

Pay screen showing the Off-cycle payments tab.
Pay space showing the Off-cycle payments tab.

 

Late Reported Payments and Invoices

Late reported payments will apply to the next available invoice for processing. The gross value will appear based on the payment type selected (ex: Salary Off-Cycle) with the appropriate employer side taxes applied.

To ensure employee-side taxes are collected but no funds are deposited into the employee’s bank account, an offsetting manual payment will appear to reduce the total debit of the invoice.

Any estimated government penalties will be listed under the Justworks Fees section as a Late Fee.

 

General IRS Penalty Guidelines

Any penalty calculated follows the guidelines from IRS Publication 3151-A (page 21) and is determined by multiplying the amount of total underpaid taxes (including federal, state and local liabilities) by the applicable percentage based on how late the deposit is made.

The percentages are set as follows:

  • 1-5 days late - 2%
  • 6-15 days late - 5%
  • 16 or more days late - 10%

 

Disclaimer

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.

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