Solved: How do I correct an error I made with CPP deduction on an employee's paycheque?

Diane18 · ‎03-11-2019

Once a month a few of our employees get $50 added to their paycheques for a phone allowance. On our June 30 pay period, I made a mistake and added the $50 to the next line below it without my knowledge until I came back from vacation. She told me about it and when I checked my mistake, $526.84 came off of that employee's CPP instead of $126.84. Yikes!!! And I've paid the Current Source Deductions. Now what do I do?

IntuitAlen · ‎03-11-2019

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

IntuitAlen · ‎03-11-2019

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

Diane18 · ‎03-11-2019

Thank you Alen. I haven't had time yet to try what you told me to do but when I do I'll let you know if it works for me.

Alta · ‎05-01-2019

What should I do for Quickbooks online, not desktop.

AddieB · ‎05-01-2019

Hi Alta,

Making adjustments to your QuickBooks Online prior payroll information requires you to fill out what we call a Pay Edit Template. Once you fill this out, you can submit it to our Payroll Corrections team and we'll do all the heavy lifting for you behind the scenes.

To get your hands on a template, you can reach out to our phone support team at 855-253-1536 from Monday - Friday, 9am-8pm EST. You can also reach out to our Social Media team on Facebook or Twitter.

I hope this helps. Have a great day!

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