Reimburse an Employee Deduction

Occasionally you mistakenly withhold a deduction from an employee's paycheck and then need to reimburse the employee.

• Reimbursements can be handled in Accounts Payable, but then the employee W-2s would be incorrect because W-2 information is drawn only from Payroll.

• If you're reimbursing a system deduction, you will need to adjust it in Employee W-2 Information by reducing the system deduction amount by the amount of the negative deduction. You'll also need to adjust the Form 941 Quarterly Information Report.

The reimbursement should be made using a negative fixed amount deduction. You can use either Manage Deductions or Deduction Assignment.

Using Deduction Assignment

Use Deduction Assignment when you need to reimburse a variable fixed amount deduction.

1. Create a new deduction set.

2. Enter a negative amount in the employee amount field. The amount will be added to the paycheck.

Using Manage Deductions

Use Manage Deductions when you need to reimburse a non-variable fixed amount deduction, a percentage amount deduction, or a system deduction.

1. Create a fixed amount deduction specifically to handle reimbursements — for example FICA Reimbursement.

2. Enter a negative amount in Employee Information > Pay Period Amount.

3. Enter begin and end dates for a single period so you won't have to change it for the next payroll.

4. Add the new deduction to the employee's deduction set.

Return to Deduction Assignment Overview