Depending on processing times, you may be able to delete or void the paycheck then recreate it. You can also add a deduction item to a future paycheck to reduce wages for any overpayments.
Step 1: Create a payroll item to reduce wages
- Go to Lists, then Payroll Item List.
- Select the Payroll Item button, then New.
- Select Custom Setup, then Next.
- Select Deduction, then Next.
- Enter the name of the payroll item that will be easily identifiable, then Next.
- In the Liability account field, enter the same expense account that was used for the original compensation item with which the employee was overpaid. Select Next.
- Select a tax tracking type of Compensation. Select Next twice.
Note: Select Compensation to adjust the year to date taxes that were withheld because of the overpayment. - Select Calculate this item based on Quantity if the employee was paid hourly, or select Neither if the employee was paid with a salary item. Select Next then Finish.
Step 2: Add the payroll item to the next paycheck.
Add the new deduction payroll item to a paycheck for the overpaid employee, then enter the amount of the overpayment.
The deduction item must be added to a paycheck with equal or more earnings than the amount that will be deducted, as QuickBooks can't create a paycheck with a negative net pay.
- If the employee was paid hourly:
- In the Rate field for the deduction, enter the rate that was used when the employee was overpaid.
- in the Quantity field for the deduction, enter the number of hours the employee was overpaid.
- If the employee was paid salary, enter the amount of salary the employee was overpaid. Leave the Quantity field blank.
If the overpayment is on a termination check, you'll need to collect the overpaid amount from the employee, then void and recreate the check.