Refunding Payroll Item

Owned by Stephanie Schmucker
Last updated: May 23, 2024 by Sara Glore
8 min read

Refund a Payroll Item during Regular Payroll Process - Employee is being paid during payroll

If you have multiple refunds to process instead of going to the Employee’s Dashboard as noted below you can go to Core/Payroll Item/Error Adjustment OR Employer Error Adjustment to create the refund transactions.

  1. Go to the employee’s Dashboard.

  2. Click on Payroll Items.                                                                      

  3. Locate the Payroll Item you will be processing the refund for and click on the edit icon.                                              

  4. Go to the Error Adjustments section and click on +Create .                                                                                               

  5. Add the refund Amount as a negative number, and Description. The Date can left blank if you want this refund to process with the next payroll. If you wish to process this refund at a later time, that date should be within the period beginning and ending date of a payroll being processed, not the Pay Date.

  6. Click on the Save button.

In order for a refund to take place the Payroll Item Pay Cycle must be the Pay Cycle that is being processed on the Payroll. Example- Payroll Item Pay Cycle is set as Split Between First and Second Pay of the Month. The payroll being processed is the Third Pay of the month. This refund will not be processed during this pay because the Pay Cycle does not match and therefore the refund would not be processed until the next payroll processed for first or second pay of the month.                          

  1. If there is an Employer Error Adjustment involved, you will need to scroll to the Employer Error Adjustment section and click on the +Create button.

  2. Add the refund Amount as a negative number, and Description. The Date can left blank if you want this refund to process with the next payroll. If you wish to process this refund at a later time, that date should be within the period beginning and ending date of a payroll being processed, not the Pay Date.

  3. Click on the Save button.                                                                                                                         

If you want to delete the Employee or Employer Error Adjustment record, click the Delete icon.

  1. Initialize your payroll.  On the Pay Report you will see the refund amount:

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  1. Complete the Payroll processing.

Outstanding Payables

Once the refund is processed and the payroll is posted, the amount is placed in Processing>Process Outstanding Payables. 

  • If the amount of the refund should not affect the payable total, (money was sent back to district, deposit into Payroll Clearance account), a Payables Adjustment should be posted.  To do so, go to the Payables Adjustments tab to create an offsetting entry.  Click Create, enter the Employee, the Payroll Item, the Employee Amount and/or Employer Amount, and a Description.  Click Save.

  • If no check was sent by a deduction company and the amount should short the current payables check, then no Payables Adjustment is needed. 

Refunding a Payroll Item Outside of a Payroll Process - Employee no longer being paid or Refund payment to the employee immediately.

Process as a Check

Process as an ACH

Process as a Check

Process as an ACH

  1. Go to the employee’s Dashboard.

  2. Click on Payroll Items.                                                                      

  3. Locate the Payroll Item you will be processing the refund for and click on the edit icon.                                              

  4. Go to the Error Adjustments section and click on +Create .                                                                                               

  5. Add the refund Amount as a negative number, and Description. The Date can left blank if you want this refund to process with the next payroll. If you wish to process this refund at a later time, that date should be within the period beginning and ending date of a payroll being processed, not the Pay Date.

  6. Click on the Save button.                                                                                                                                                           

  7. If there is an Employer Error Adjustment involved, you will need to reference the Adjusting Employer Paid Amount Without Refund Processing, also in this checklist.

  8. Click on the Save button. 

  1. Go to Processing/Payroll Item Refund.

    1. Find the employee using the grid and search by Last Name or Number.

    2. Click on box next to the appropriate record. 

    3. Click Refund Selected Payroll Items from the top of the grid

  2. Check processing: 

    • Choose the Payment Option (Check Payment)

    • Bank Account (Default Bank Account is defaulted or you can choose from the drop down)

    • Starting Check Number will automatically default to the next available Payroll Check Number

    • Transaction Date is already defaulted to the current date. This can be changed if desired.

    • Choose the Output Format (XML-export file for printing software or PDF)

    • Pay Plan (Choose from drop down)

    • File Name is defaulted (PayrollItemRefundYYYY-MM_DD.xml) can be changed if desired.

    • Click Process Refunds

    • Transfer the PayrollItemRefund.xml file to your desktop or a folder of your choosing to upload the file to your printing software to print out the check.

Outstanding Payables

Once the refund is processed and the payroll is posted, the amount is placed in Processing>Process Outstanding Payables. 

  • If the amount of the refund should not affect the payable total, (money was sent back to district, deposit into Payroll Clearance account), a Payables Adjustment should be posted.  To do so, go to the Payables Adjustments tab to create an offsetting entry.  Click Create, enter the Employee, the Payroll Item, the Employee Amount and/or Employer Amount, and a Description.  Click Save.

  • If no check was sent by a deduction company and the amount should short the current payables check, then no Payables Adjustment is needed. 

  • To get a detail print out of the Refund of Payroll Item for this employee, go to Payments/Refund/Refund Payments, select the employee and click on Detail Report.

  • To see the Adjustments that were made for this refund, go to Core/Adjustments and search for the employee.

  1. Go to the employee’s Dashboard.

  2. Click on Payroll Items.                                                                      

  3. Locate the Payroll Item you will be processing the refund for and click on the edit icon.                                              

  4. Go to the Error Adjustments section and click on +Create .                                                                                               

  5. Add the refund Amount as a negative number, and Description. The Date can left blank if you want this refund to process with the next payroll. If you wish to process this refund at a later time, that date should be within the period beginning and ending date of a payroll being processed, not the Pay Date.

  6. Click on the Save button.                                                                                                                                                           

  7. If there is an Employer Error Adjustment involved, you will need to reference the Adjusting Employer Paid Amount Without Refund Processing, also in this checklist.

  8. Click on the Save button. 

  1. Go to Processing/Payroll Item Refund.

    1. Find the employee using the grid and search by Last Name or Number.

    2. Click on box next to the appropriate record. 

    3. Click Refund Selected Payroll Items from the top of the grid

  2. ACH Processing:

    • Choose the Payment Option (ACH Electronic Payment)

    • Transaction Date is already defaulted to the current date. This can be changed if desired

    • Choose the ACH Source (Payroll ACH Transfer) from the drop down

    • Pay Plan (Choose from drop down)

    • File Name is defaulted (ACH_BankName.txt) can be changed if desired

    • Click Process Refunds

    • Transfer the ACHSXXXXXXXX.txt file to your desktop or a folder of your choosing and upload the file to the bank’s website.     

Outstanding Payables

Once the refund is processed and the payroll is posted, the amount is placed in Processing>Process Outstanding Payables. 

  • If the amount of the refund should not affect the payable total, (money was sent back to district, deposit into Payroll Clearance account), a Payables Adjustment should be posted.  To do so, go to the Payables Adjustments tab to create an offsetting entry.  Click Create, enter the Employee, the Payroll Item, the Employee Amount and/or Employer Amount, and a Description.  Click Save.

  • If no check was sent by a deduction company and the amount should short the current payables check, then no Payables Adjustment is needed. 

  • To get a detail print out of the Refund of Payroll Item for this employee, go to Payments/Refund/Refund Payments, select the employee and click on Detail Report.

  • To see the Adjustments that were made for this refund, go to Core/Adjustments and search for the employee.

Adjusting Employer Paid Amount Without Refund Processing

  1. To enter in the refunded employer amount without processing through a pay go to Core/Adjustments and click +Create.

  2. Find the Employee, the Payroll Item from the drop down, the Type-Board Amount of payroll item from the drop down. Enter a Transaction Date or choose date from the calendar. Enter the refund Amount as a negative figure. A Description can be added if desired.

  3. Click Save.

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