This help guide will detail how to correct an overpayment in Workforce. Please note that this guide is only relevant for Workforce Payroll subscribers.
In the event that an employee is overpaid on a particular pay stub, the overpayment correction feature will allow you to reverse the original pay stub and recover the overpaid amount through future payrolls.
Before You Begin
The pay stub you want to correct must already be posted.
Overpayment corrections cannot be created for pay stubs from a prior quarter.
There must be no conflicting draft pay runs for the employee's pay group.
Step 1: Locate the Pay Stub
Navigate to Payroll > Pay Runs, then open the posted pay run containing the overpaid pay stub. Click into the employee's pay stub.
Step 2: Initiate the Correction
On the pay stub, click Correct Overpay.
You will be asked to confirm: "This will create a new pay run with adjustments to correct the overpayment. Do you want to continue?".
Click Yes, Correct Overpay to proceed.
Step 3: Review the Correction Pay Run
The system will automatically create a new out-of-cycle adjustment pay run with an inverse (negative) copy of the original pay stub resulting in a Net Pay of $0.00
All the original amounts on the original paystub will be the negative of their original amount. This includes:
Negative earnings lines that reverse the original earnings
Negative tax lines that reverse the taxes withheld
Negative reimbursement lines (if applicable)
Negative time off lines that reverse any time off hours
Negative accrual lines that reverse any time off hours accrued, but only for time off types that accrue based on hours worked. Leave types using other accrual methods (e.g., per pay period) are not affected, as those accruals are not tied to the hours on the original pay stub.
Note: Deductions, contributions, and garnishments are not reversed, as these amounts have already been remitted and cannot be reverted.
A new cash advance line will be added for the net overpayment amount (total earnings + reimbursements - employee taxes). Here you can adjust the deduction per payslip amount on the cash advance line to control how much is recovered from each future pay run.
If multiple employees have been overpaid, you can also add overpay corrections to the new adjustment pay run by navigating to the overpaid pay stub and clicking Correct Overpay as described in Step 2.
Step 4: Post the Correction
Once you've reviewed the correction(s), post the pay run as you would any other pay run. The status will update to Overpay Adjustment Posted.
How Recovery Works
When the correction is posted, the cash advance creates an automatic deduction that will be applied to the employee's future pay stubs until the overpaid amount is fully recovered. The deduction per pay stub amount determines how much is recovered from each subsequent pay run.
Important Notes
You cannot add new earnings, deductions, or other lines to an overpayment correction pay stub.
If multiple employees in the same pay group were overpaid, their corrections will be grouped into a single adjustment pay run.
Each pay group will have its own separate correction pay run.
Deductions, contributions, and garnishments that have already been paid cannot be reversed through this process.
Only time off accruals based on hours worked are reversed. Other accrual methods are unaffected.