How do i refund an employee national insurance overpayment?since september the employee has been exempt due to reaching retirement age ( they forgot to tell me)

I'd be glad to walk you through processing a refund for your employee's national insurance overpayment, @Paul ws.

Here's how:

1. Go to the Workers menu, then to Employees.
2. Pick an employee's name, then click the Pencil icon next to Pay.
3. Under How much do you pay, select Add additional pay types.
4. Select Even more ways to pay drop-down, then select Reimbursement. 
5. Hit Done.

There you go. The reimbursement item will now appear in the Pay column when you create a paycheck for the employee.

I've enclosed an article that will guide you in managing your employee's reimbursements in QuickBooks Online.

You always got me here if you need more assistance working with your reimbursement. Take care!

Hi @katherinejoyceO 

Will this Reimbursement work for National Insurance?

I don't use QB Payroll but it looks to be more tailored to reimbursement for expenses.

@Paul ws is specifically asking about repayment of NI Contributions that were deducted in error (& will have been paid to HMRC).

This is something that should not be possible if the employee's DoB is entered correctly.  QB Payroll really ought to amend the employee's NI Code Letter automatically (the payroll software I use certainly does).

@Paul ws you might find that this is quite complicated.

PAYE rebates aren't a problem - the system is designed to balance over the year - but NI is not & there is no mechanism to refund overpaid NICs.

It will probably have to be an In Year Adjustment to reduce the NI Liability account (which will reduce the amount paid to HMRC next month) & pay this to the employee. You can probably do this by Journal(s) but you might have to 'undo' previous RTI submissions as well.

Hi 

we have two cases where they have rerached retirement age and the letter code was still A , i have manually changed it, in one case its a few months and a few hundred pounds . QB did not change the letter automatically and the DOB is correct 

@Paul ws Hi Paul, I am in the same boat as you were, were you able to sort out the refund for the NI contributions that were paid after the employee reached retirement age? If yes, can you please tell me the steps.

I had contacted Intuit who told me to change the code for the retired employee to 'C' and send an FPS on the next pay run, this should trigger a refund by HMRC for the previous pays that included the employee's NI contributions (after retirement age). This was also confirmed by HMRC as i had phoned them to double check.

On checking my PAYE liability balance a month later by logging into HMRC, there was no refund or reduction in liability. I phoned HMRC again and was today that I would need to undo the previous FPS right to when the employee reached retirement age, change the code to 'C' and then resend them. But wouldn't this cause a problem with what the employee was paid (after deducting NI) and now changing the code would increase their net pay? This is going to cause a lot of problems balancing the books especially where bank accounts had be reconciled.

Any help will be appreciated.