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How to correct an overpayment that is made to an employee in Payroll in Microsoft Dynamics GP

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This article describes how to correct an overpayment that is made to an employee in Payroll in Microsoft Dynamics GP 10.0 or in Microsoft Dynamics GP 9.0.

Applies to:   Microsoft Dynamics GP
Original KB number:   937245

To correct an overpayment to an employee, use one of the following methods.

Method 1

Collect a check from the employee for the overpaid amount. Then, enter a negative manual check for the employee pay code that has the overpayment. To do this, follow these steps:

  1. Click Transactions, point to Payroll, and then click Manual Checks.

  2. In the Payroll Manual Check-Adjustment Entry window, click Manual Check in the Check Type area.

  3. Click the lookup button next to the Checkbook ID field, and then double-click the payroll checkbook ID.

  4. In the Check Number field, type a check number.

  5. In the Check Date field and in the Posted Date field, type the appropriate date.

  6. In the Employee ID list, click an employee ID.

  7. Click Transactions.

  8. In the Payroll Manual Check Transaction Entry window, click the appropriate transaction type in the Transaction Type list.

    Note

    You must select an appropriate transaction type to enter corrections for pay codes, for taxes, and for deductions. Each transaction type requires an entry.

  9. Type the date in the Date From field and in the Date To field. The dates must match the original payroll dates.

  10. In the Amount field, type the correcting values.

    Note

    If the code was overpaid, enter the amount as a negative value. If the code was underpaid, enter the amount as a positive value.

  11. If you are correcting taxes, type the appropriate correction value in the Taxable Wage field for the tax or for the deduction. The correction value should correct the taxable wage amount through the end of the year.

  12. Click Save.

  13. Repeat steps 7 through 11 until all entries have been completed for the employee.

  14. Close the Payroll Manual Check Transaction Entry window. Then click Post.

Method 2

Set up a deduction that withholds the overpayment amount for the employee. Then, include that deduction in the next payroll. After you process the payroll together with this deduction, enter a negative manual check for the pay code and for the deductions to correct the employee summary information. To do this, follow these steps:

  1. Follow the appropriate step:
    • If you are using Microsoft Dynamics GP 10.0, point to Tools on the Microsoft Dynamics GP menu, point to Setup, point to Payroll, and then click Deduction.
    • If you are using Microsoft Dynamics GP 9.0 or an earlier version, point to Setup on the Tools menu, point to Payroll, and then click Deduction.
  2. Create a deduction code that can be assigned to the employee to withhold the overpayment amount. Then click Save.
  3. Click Cards, point Payroll, and then click Deduction.
  4. Click the lookup button next to the Employee ID field, and then double-click the employee who was overpaid.
  5. Click the lookup button next to the Deduction field, and then double-click the deduction that was created in step 2.
  6. Click Save.
  7. Process the payroll as usual. Include the deduction that you assigned to the employee in the previous steps.

After the payroll is processed, the amount that was overpaid to the employee is withheld because of the deduction. You can now take the following actions:

  • Enter a negative manual check to reduce the amount that is taken for the deduction.
  • Reduce the original pay code for the overpayment.

To do this, follow these steps:

  1. Click Transactions, point to Payroll, and then click Manual Checks.

  2. In the Payroll Manual Check-Adjustment Entry window, click Manual Check in the Check Type area.

  3. Click the lookup button next to the Checkbook ID field, and then double-click the payroll checkbook ID.

  4. In the Check Number field, type a check number.

  5. In the Check Date field and in the Posted Date field, type the appropriate date.

  6. In the Employee ID list, click an employee ID.

  7. Click Transactions.

  8. In the Payroll Manual Check Transaction Entry window, click the appropriate transaction type in the Transaction Type list.

    Note

    You must select an appropriate transaction type to enter corrections for pay codes, for taxes, and for deductions. Each transaction type requires an entry.

  9. In the Date From field and in the Date To field, type the appropriate dates. The dates must match the original payroll dates.

  10. In the Amount field, type the correcting values.

    Note

    If the code was overpaid, enter the amount as a negative value. If the code was underpaid, enter the amount as a positive value.

  11. If you are correcting taxes, type the appropriate correction value in the Taxable Wage field for the tax or for the deduction. The correction value should correct the taxable wage amount through the end of the year.

  12. Click Save.

  13. Repeat steps 2 through 12 until all entries have been made for an employee.

  14. Close the Payroll Manual Check Transaction Entry window. Then click Post.