how to reimburse a deduction for healthcare plan that was taken off cheque by mistake?

Hi there, Mandy. When a non-tax payroll deduction, like health insurance, is incorrectly deducted, you should refund the employee through payroll. The process ensures the liability for the payroll item is correctly adjusted in QuickBooks, eliminating the need for a separate liability adjustment.

Following these steps ensures that record-keeping aligns with your payroll accounts for accuracy and compliance.

1. Create a paycheque for the affected employee and open the Review or Change Pay Cheque window.
2. Leave the Earnings section blank. To delete salary payroll items, press Ctrl + Del. For hourly items, ensure no hours are entered.
3. In the Employee Summary section, enter a positive amount for the healthcare deduction payroll item that was mistakenly deducted.
4. QuickBooks will display a message confirming the adjustment. Select Yes to continue.
5. Save and record the paycheque, ensuring that the liability for the payroll item is automatically adjusted by QuickBooks.

Once processed, the reimbursement is aligned with payroll and benefits tracking for accurate record-keeping. QuickBooks adjusts the liability for the payroll item when you write the paycheque, so do not enter a liability adjustment in addition.

To ensure accurate categorization, I recommend discussing this final entry with your accountant. This will help keep your records precise and ensure the changes align with your financial processes.

If you have any additional concerns, please share them with us.