That's a great question, Diane.
If you overpaid your employee for CPP, you can fix this by doing an adjustment for the payroll liability within the company side and the employee. Here's how:
Adjust the payroll liabilities for the company
- From the Employees menu, select Payroll Taxes and Liabilities, then Adjust Payroll Liabilities.
- Change the Date to date that the adjustment is for.
- Change the Effective Date to date that the adjustment
is for. The effective date will depend on whether the adjustment should
be reflected in the period that it occurred or in the next remittance
period.
- In the Adjustment is for section, select Company.
- In the Item Name drop-down, select the payroll item you wish to adjust.
- To adjust an overpayment, enter a negative amount of the adjustment.
- Enter an explanation in the Memo field, if desired.
- Click the Accounts Affected button.
- If you want the payroll adjustment to affect accounts, select Affect liability and expense accounts. Otherwise, select Do not affect accounts.
- Click OK to close the Affect Accounts window.
- Click OK again to record the adjustment.
Adjust the payroll liabilities for the employee
- From the Employees menu, select Payroll Taxes and Liabilities, then Adjust Payroll Liabilities.
- Change the Date to date that the adjustment is for.
- Change the Effective Date to date that the adjustment
is for. The effective date will depend on whether the adjustment should
be reflected in the period that it occurred or in the next remittance
period.
- In the Adjustment is for section, select Employee.
- Select the Employee from the drop-down list. The adjustment can affect the T4 for that employee.
- List the payroll items that will be adjusted under Taxes and Liabilities with the corresponding amount. To adjust an overpayment the amount will be negative.
- Enter an explanation in the Memo field, if desired.
- Click the Accounts Affected button.
- If you want the payroll adjustment to affect accounts, select Affect liability and expense accounts. Otherwise, select Do not affect accounts.
- Click OK to close the Affect Accounts window.
- Click OK again to record the adjustment.
After when the adjustments are done on both sides, once you run Payroll; QuickBooks Desktop should automatically detect that your employee overpaid CPP and will not deduct it from their pay. If it does deduct CPP from the pay, you can manually adjust it by double clicking within the paycheck.
I would recommend consulting with an accountant to make sure you're applying the correct amounts to the correct accounts. If you have any other difficulties, you can contact our QuickBooks Desktop Technical Support team at 1-877-772-9158 and we can assist you further with this.
All the best!
Alen
