Refund your employee for a deduction that was overwithheld

Learn how to pay your employee back for an incorrect paycheck deduction.

If you overwithheld a retirement plan, health insurance, or garnishment deduction on your employee’s paycheck, you’ll need to reimburse them.

We’ll show you how you can refund your employee on their next paycheck. 

Intuit QuickBooks Workforce

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Many scenarios needing corrected paychecks can now be directly done in Intuit QuickBooks Workforce. Follow the steps on how to Handle overwithheld or underwithheld employee-paid taxes to correct an overwithheld deduction. Once corrected, you may either pay the employees back directly or reimburse your employee.

Note that you may need to additional pay types or payroll deduction items to ensure the edited paycheck still has the same net pay as the original paycheck cashed by employee. Be sure to double check your account mapping and settings to ensure the correct accounting of this scenario in your chart of accounts.

QuickBooks Desktop Payroll

You can refund your employee’s overwithheld deduction when you create and run their next paycheck. 

1. Select Open Paycheck Detail.
2. In the Other Payroll Items section, use the same deduction payroll item. Enter the amount over-collected as a positive number.
3. Select Yes on the warning message. Note: If you already sent the payment to the agency, you or your employee need to request a refund from the agency.