an employee was overpaid on two paychecks in Nov 2011. What is the best way to deduct the overpayments from future paychecks.
This is not an easy answer because of all the rules and regulations regarding this matter from the IRS lean toward the employee. Since the amount has been paid as wages for 2011 and SS & MC have been calculated the payroll is complete for 2011. You will have to have an authorization from the employee and a signed statement regarding the overpayment agreement as a deduction in wages for 2012(which still may not be legal) this has to be an adjustment to wages efore taxes. Check your state law regarding this also, its hard to collect for something that has been paid.
Thank you. I did find how to do it and I will make sure we have the signed employee agreement to deduct this in future payments. Thank you for your help.
