Handling Employee Overpayments - New Zealand

Handling Employee Overpayments will depend on agreements with the employee and would typically fall into two scenarios:

1. Employee wants the overpayments to be recovered in future pays

2. Employee refunds the company with the overpaid amount.

Scenario 1 - Employee wants the overpayments to be recovered from future pays

1. Open a Manual Pay in PayGlobal to adjust the overpayment. We generally recommend addressing this issue through a manual pay. This approach is beneficial for reporting purposes and allows you to match the accumulators with the initial overpayment.

2. In the manual pay’s transaction view, press Ctrl+A to open the Sequence Header and make sure that the accumulators are aligned to those of the Standard pay in which the overpayment occurred.

3. Put though the adjustments by adding the exact same allowance that has been overpaid but with negative quantity/amounts.

4. Process and Close Pay.

5. Adjust employee's YTD totals via MyIR directly, as a negative pay cannot be submitted via PayDay filing

6. To reflect the recovery on future pays, create a Post Tax Deduction item where you want to post the recovery amount to. This deduction item will need to be included in future pays to reflect the agreed recovery amount.

Scenario 2- Employee refunds the company with the overpaid amount

1. Follow Steps 1-5 in Scenario 1

In both scenarios, contact the IRD to get PAYE component returned to the company, as the employee will be paying back the Net amount only and outside of the payroll system

If the overpayments being adjusted is for the previous FY, you will need to do a Rebuild Accumulator to bring back this employee’s YTD to the current year. Steps on Rebuilding Accumulator is on this help page: Rebuilding accumulators