PR – Payroll Overpayments

Payroll Overpayments procedures for Campus Users
Financial Services, RT Form
Date: July 2021

Overpayment Recovery for Payroll

1. Department receives reimbursement from former employee (check from the individual made out to UMBC). If needed, review HR’s website for specific Overpayment Recovery details.

2. The Payroll Overpayment will need to be forwarded to Human resources.    HR’s Payroll Processing Associate responsible for Overpayments, will take the check to deposited as a departmental deposit. The Payroll Overpayment deposit will record to cash clearing GL account (1101015).

HR’s Payroll Processing Associate will process paperwork to Central Payroll Bureau (CPB) and email OverPayment Recovery sheet to Financial Services.

3. Financial Services will prepare the Journal entry to clear this payroll cash clearing account (1101015 ) and post the expense to Department Chartstring once the Overpayment (DDEP Journal entry) is posted to PeopleSoft.    Accounts used in conjunction with the Department’s chartstring:

PeopleSoft Finance Account Used Purpose
6010199 – Manual Salary Entry – Payroll Recover Wages or “FICA -Employee” to record the adjustment amounts.
6019999 – Manual Fringe Entry – Payroll Tax recovery for “FICA -Employer” to record the adjustment amounts.


4. For the remaining payroll Overpayment adjustment portion, Finance will prepare the Journal Entry once the adjustment is received from Central Payroll office.  Central Payroll office may take 1 to 3 months to send complete information.

If the adjustment amounts received do not totally recover for both (FICA – Employee and Employer), apply Employee taxes recovery first.

(Taxes Recovery detail information will be listed on Payroll Recovery Form. (Central Pay Bureau (CPB) sends this document in the mail to HR)

5. If the employee’s original payroll was paid from Fund 1111, 1112 and 1113, Financial Services will use the original chartstring to prepare the overpayment payroll adjustment

6. If the employee’s original payroll was paid from Fund 1114, 1115 or 1253, there is an extra step.

Extra step: Financial Services will contact the department’s business manager and verify chartstring to use.   Department needs to prepare the retro move salary and fringe OFF fund 1114,1115 and 1253.    The retro needs to move salary and fringe TO an unrestricted fund.  This step is needed to reflect accurate “Effort” for a restricted funds. Financial services will journal the overpayment TO the unrestricted fund.

If the project is inactive, the campus department must provide the new chartstring to Financial Services to prepare the Overpayment reimbursement.