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Community Contributor *

How do I reverse a payroll check

I use an outside payroll service and then enter the payroll checks into QB manually.  I had to give one of my employees a manual live check and I submitted the information to the payroll service for tax purposes.  On the next scheduled payroll, they accidentally duplicated that check and sent me another. The employee is no longer with the company so I held onto the check. I reversed the check with the payroll service and the reversal showed up on the following scheduled payroll.  My question is how do I enter this into Quickbooks?  At first, I was just going to not enter the check at all because it got reversed.  But in order  to reconcile with the bank statement (because money was taken out of my account to cover the taxes and then returned to my account) I need to record something.  

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Best answer 12-10-2018

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Established Community Backer ***

The entries to compensate is to post the Write Check, on...

The entries to compensate is to post the Write Check, on the expenses tab, to Other Asset (= still yours). Then, the Deposit is "from" Other Asset = you got repaid.

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Established Community Backer ***

The entries to compensate is to post the Write Check, on...

The entries to compensate is to post the Write Check, on the expenses tab, to Other Asset (= still yours). Then, the Deposit is "from" Other Asset = you got repaid.

Community Contributor *

Thank you for your help. You always have the best advice....

Thank you for your help. You always have the best advice. I figured out how to reverse the payroll taxes.  But I'm left now with a payroll check that will never be cashed.  How can I clear that check?
Established Community Backer ***

"But I'm left now with a payroll check that will never be...

"But I'm left now with a payroll check that will never be cashed."

Then you missed part of the entries. The Paycheck is the Net from a Gross Activity.

"I reversed the check with the payroll service and the reversal showed up on the following scheduled payroll."

Then All of this data, as Gross wages, employer tax expense, and Net Takehome, was offset. Not just the Check and not Just the taxes. All of it.



Community Contributor *

So how do I fix it?

So how do I fix it?
Established Community Backer ***

"So how do I fix it?"You stated this: "I figured out how...

"So how do I fix it?"

You stated this: "I figured out how to reverse the payroll taxes."

You need to reverse All of the values, not just taxes.

I don't know what the original entry looked like. Here is one example:

The duplicate run for that person's paycheck is Not posted to expense or liability or anything; it is a Check from Checking and posted to Other Asset. Then Reversal from the Payroll Company gives you that exact amount back ; make deposit "from" that same Other Asset account.