How to correct opening balances

Opening balances are the year-to-date figures FreePayroll held before an employee’s first payroll in the current tax year. If these figures were entered incorrectly, you can correct them from the employee’s Year to Dates page.

This creates an opening balance correction and reopens the affected submitted payrolls in order, so FreePayroll can recalculate the employee’s year-to-date position correctly.

Before you start

You can only correct opening balances for the current tax year.

You can only correct one employee at a time.

You cannot start an opening balance correction while another correction is already in progress.

The employee must have at least one submitted regular payroll in the current tax year.

Previous employment pay and tax are separate from opening balances. You can edit those directly from the Year to Dates page without starting an opening balance correction.

Steps

1. Go to People.
2. Open the relevant employee.
3. Select Year to Dates.
4. Make sure the current tax year is selected.
5. Select Correct opening balances.
6. Review the employee and tax year shown on the correction page.
7. Enter the correct opening year-to-date figures.

You can update figures for:

• Income Tax
• Statutory payments and student loans
• Payrolled benefits and pensions
• National Insurance categories, including director NI fields where applicable

8. Select Continue to review.
9. Review the correction chain. This shows the submitted payrolls that will be reopened and completed as part of the correction.
10. Select Start opening balance correction.
11. Open the active correction step from the correction workspace.
12. Review the reopened payroll and complete it.
13. Continue through each correction step until the chain is complete.

Once the final step is completed, payroll returns to normal processing.

Why FreePayroll reopens payrolls

Opening balances affect the employee’s year-to-date totals. If payrolls have already been submitted after those balances were entered, FreePayroll needs to recalculate the affected payrolls in sequence. This keeps later year-to-date totals consistent with the corrected opening figures.

If the button is unavailable

The Correct opening balances button may be disabled if:

• You are viewing a historical tax year
• Another correction is already in progress
• The employee does not have a submitted payroll for the current tax year

Finish any active correction first, then return to the employee’s Year to Dates page and try again.

Updated on: 25/05/2026