Harmony P - Overpayment of an Employee

Description

You’ve overpaid an employee and will need to fix it. If paying by check/cheque, the employee may or may not have already deposited it. If paying by direct deposit/EFT, the bank may have already processed the bank file. In either case, this article will provide a potential solution.

Pre-Requisites

None.

Solution

I have not posted my payroll, but have printed my checks/cheques.

1. Destroy the incorrect checks/cheques. 
2. Modify the employee’s paycard record with the appropriate information. 
3. Re-create and re-print the checks/cheques.
4. Proceed with payroll normally. 

I have not posted my payroll, but have created my bank file.

1. Delete the bank file on your computer. 
2. Modify the employee’s paycard record with the appropriate information.
3. Re-create the bank file. 
4. Proceed with payroll normally. 

I have posted my payroll and have already sent the bank file to the bank.

If the bank has not yet processed the bank file, you will have to work with your bank to cancel the file submission in order to allow you to resend the file. 

If the file was already processed, you will need to recover the overpayment from the employee by having the employee ‘repay’ the company. Your employee can provide a payment directly to the company or have it deducted from their next pay. 

WARNING: If you are recovering the amount from the employee, remember that their taxes were calculated on the higher payment amount. Therefore, the taxes for the overpaid employee will be different. When you recover the amount, you will need to run payroll and enter the ‘gross’ amount as a negative in the payroll category that you overpaid with. Ensure that the corresponding taxes are also reflected! 

I have posted my payroll and the employee was paid with a check/cheque, but it has not yet been deposited.

If the employee has not yet deposited the check/cheque, you will need to reverse their payment in Harmony. 

1. Navigate to Configuration > Tools > Company Backup. 
2. Enter a "Backup File Name" in the field.
3. Click the “Backup” button to create a backup file of your company. 
   Note: It is very important to back up your company data before reversing an employee’s payment. A backup file will allow you to return your company to this point in time, in the event that you make another mistake. 
4. Navigate to Payroll Employees > Paycard History.
5. Select the payroll group that the overpaid employee is in from the 'Payroll Group' dropdown field. 
6. Click the refresh icon located in the upper-middle of the page.
7. Select the overpaid employee in the list that appears in the bottom half of the page.
8. Click the “Reverse” button on the upper right corner of the page. 
   Note: This will create an opposing record in the employee’s history, which will be included when you export to GL. This will be balanced and limits the need for manual transactions. 
9. Re-run the payroll as normal for the particular pay period and employee and process it with the correct information.
10. If the employee has already been deposited, you will need to recover the overpayment from the employee by having the employee ‘repay’ the company. Your employee can provide a payment directly to the company or have it deducted from their next pay.

WARNING: If you are recovering the amount from the employee, remember that their taxes were calculated on the higher payment amount. Therefore, the taxes for the overpaid employee will be different. When you recover the amount, you will need to run payroll and enter the ‘gross’ amount as a negative in the payroll category that you overpaid with. Ensure that the corresponding taxes are also reflected!