Repayment of Overpaid Wages Office of Ethics, Compliance & Privacy The George Washington University

The auditor or analyst will report all “Additional” requests on the Agency Correction Report. If the overpayment is not resolved the payroll department may send the information to the Collections Department. An employee received gross $5,832.75 and paid taxes of $2,169.85 and $100 in health insurance. In this case, the employee received a net payment of $3,563.80. The check or money order should be in the amount of the net value of the overpayment.

Letting your How To Handle Payroll Overpayments And Repayments know can help avoid confusion and frustration. Not to mention, putting it in writing—and getting your employee’s authorization—can act as documentation. Integrated software and services for tax and accounting professionals. James Paille, CPP is the Director of Operations for Thomson Reuters myPay Solutions.

Method 1: Payroll Deduction

The only place the deduction amounts could reasonably be posted is to miscellaneous income. Departments – Majority of overpayments occur due to late paperwork. If an employee is on leave or terminated and is still receiving a paycheck, please contact the payroll department as soon as possible. When prior year overpayments are received on or after April of the following year, the last payroll in December of the year that the overpayment occurred is used to process the reversal for the labor schedule.

The deduction is a reduction of current pay for a prior pay period. When there is a retroactive change to HRS or a terminated employee has overused leave, there is a very real likelihood that an overpayment has occurred. Several factors determine how the overpayment is repaid to UWM. Below is a general overview of overpayments at UWM and how they should be handled.

Collections Process

Run a https://adprun.net/ Simulation in the current period to determine the /559 Payment amount, which is the amount of adjusted taxes and retirement. The difference between the gross overpayment and this adjustment is the net overpayment . However, processing other retroactive payments at the same time may alter this calculation. We will discuss these regulations and more including the private letter ruling that governs the IRS requirements. We will examine the FLSA requirements on recouping overpayments including the 1998 opinion letter that spells out these requirements. We will also discuss how to conduct research to determine the state’s requirements for handling overpayments.