How to refund pension contributions
If you have deducted too much pension from an employee, you may need to refund this back to them. You can do this in one of two ways:
1. Enter a negative pension contribution on the employee’s timesheet or reduce the usual contribution by the amount of the refund. Alternatively, if there is not an ongoing contribution then enter just the refund amount with a – in front of it in time and pay. For example if the standard weekly pension contribution is €25.00 and the amount to be refunded is €10.00 then edit the pension contribution deduction in time and pay to be €15.00 (€25-€10).
2. Set up a new payment to be used in time and pay for the refunded amount. Then edit the ytd pension contributions in the deductions tab of employee record to take into account the refunded amount. See instructions below:
- If the pension was originally deducted as a gross deduction ie it was deducted from gross pay before paye tax was calculated, then the refund must be subject to paye but not usc or prsi as these were already charged on the original income before the pension contribution was deducted.
- Click Company/payroll then Payments and New. Enter details as shown below and save.
- Click Edit Employees and select the relevant employee. Click the Deductions tab, Amend the Balance E’e and Total E’e to the correct year to date total for the pension. If required, to correct the employer amounts, you can edit the Balance E’r and Total E’r values.
- In Enter Time and Pay enter the refund amount against the payment you set up earlier.
Note you may have to use method 2 in some cases where pension contributions are calculated using formula and cannot be manually edited in time and pay.