How do we recover an amount paid to an employee through Payroll

If you have paid an amount to an employee and due to the resignation or any other reason you want to recover this amount you will need to follow the steps outlined below.

1. Make the head as "Recoverable" - this can be done by the Application Administrator. Refer article on "Setting up Salary Heads" for more details

2. When you are running payroll you would be able to recover an amount paid in the current tax year against such heads. You will not be able to recover an amount paid in previous tax year through this method.

3. In the second step of payroll you can select the use "Previous Payment Recovery" section to recover the amount as shown in the image below.

4. Recovered amount cannot be more than the amount paid in the tax year.

Please note that amount recovered through this process will not impact the PF, ESI, LWF, PT or LWP deductions. It will be reduced from the taxable income and impact the total tax liability.

The recovered amount is shown in the salary register for all salary heads, for Benefits u/s 17(2) you can see the recovered amount in Salary Reports > Benefits Payment report.