Forum Discussion

Amberdiva's avatar
Amberdiva
Experienced Cover User
3 years ago
Solved

Payroll adjustments due to overpayment

Hi, I'm wondering if someone can help me figure out this puzzle please?    3 staff were overpaid. The 3 pays were reversed however the funds had already been transferred through the bank. 3 new pay...
  • Tracey_H's avatar
    Tracey_H
    3 years ago

    Hi Amberdiva 

     

    Thanks for your post. Typically if an employee has been overpaid and the wage has been transferred through the bank you wouldn't adjust the pay transaction. This is so the amount transferred matches the pay transaction. To fix the error you would process an adjustment pay if the employee was repaying the overpaid amount or include the adjustment in the following pay if you are withholding the overpaid amount. Again this is so the amount transferred matches the pay transaction.

     

    How you fix your current issue will depend on whether you use bank feeds and how you want to handle the reconciliation of those transactions. Your options are:

    1. Reverse the second pay and reprocess without the adjustment. You won't be able to match bank feeds because the amounts are different so you'll need to manually reconcile both weeks pay transactions.
    2. Reprocess the first weeks original pay transaction so that the net amount matches the amount transferred and reverse the new pay. Leave the second week's pay with the adjustment. You'll be able to match bank feeds because the amounts are the same.

     

    Fixing a payroll overpayment or underpayment 

     

    Please let me know if you need further help with this.

     

    If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

Tracey_H's avatar
Tracey_H
Former Staff

Hi Amberdiva 

 

Thanks for your post. Typically if an employee has been overpaid and the wage has been transferred through the bank you wouldn't adjust the pay transaction. This is so the amount transferred matches the pay transaction. To fix the error you would process an adjustment pay if the employee was repaying the overpaid amount or include the adjustment in the following pay if you are withholding the overpaid amount. Again this is so the amount transferred matches the pay transaction.

 

How you fix your current issue will depend on whether you use bank feeds and how you want to handle the reconciliation of those transactions. Your options are:

  1. Reverse the second pay and reprocess without the adjustment. You won't be able to match bank feeds because the amounts are different so you'll need to manually reconcile both weeks pay transactions.
  2. Reprocess the first weeks original pay transaction so that the net amount matches the amount transferred and reverse the new pay. Leave the second week's pay with the adjustment. You'll be able to match bank feeds because the amounts are the same.

 

Fixing a payroll overpayment or underpayment 

 

Please let me know if you need further help with this.

 

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

Amberdiva's avatar
Amberdiva
Experienced Cover User
3 years ago

Thanks Tracey. The missing piece of the puzzle was that our payroll admin had created a clearing transaction dated months after the original ones, which had also created another discrepancy on the bank. Fixed now but thank you for the advice on how to resolve in future.