Payroll
Payroll Error – How to Correct It Properly?
· 3 min read
A payroll error is handled differently depending on whether it is an underpayment or an overpayment. An overpayment cannot simply be deducted — the Czech Labour Code strictly limits wage deductions.
Short answer
IT DEPENDS
Underpayments are straightforward to fix. For overpayments, it depends on whether the employee knew they were not entitled to the amount — otherwise, you need their written consent for a deduction.
Quick take
- Pay an underpayment as soon as possible, ideally via an extraordinary payroll run.
- An overpayment can only be deducted in statutory cases; otherwise, a written deduction agreement is required.
- Adjust statutory contributions, the payroll sheet, and monthly reports.
- Always explain the error to the employee in writing.
Wage Underpayment
Pay the difference immediately and reconcile contributions in the next payroll period. If statutory late-payment interest has accrued, it is advisable to offer it to the employee. Reflect the underpayment in the payroll sheet for the month to which it substantively belongs; otherwise, statutory monthly reports and pension insurance record sheets (evidenční listy důchodového pojištění) will not match.
Wage Overpayment
An employer may only unilaterally deduct strictly defined items, such as a wage advance or an improperly paid amount that the employee knew they were not entitled to receive. In all other cases, conclude a written agreement on wage deductions or request a voluntary repayment. Deducting without an agreement risks a labour dispute and penalties from the Labour Inspectorate (Státní úřad inspekce práce).
Correcting Contributions and Reports
After adjusting the wage, recalculate social security and health insurance contributions, as well as the income tax advance. If monthly reports have already been submitted, submit amended filings in the prescribed manner. For errors from previous tax years, the correction will be reflected in the annual tax reconciliation (roční zúčtování daně) or the employee's personal tax return.
How to Prevent Errors
Implement a four-eyes check: ensure attendance records match timesheets, timesheets match the payroll sheet, and the payroll sheet matches actual bank transfers and statutory filings. Pay special attention to mid-month changes in contracted hours and retroactive bonus adjustments.
What to do now
- 1Determine whether it is an underpayment or overpayment and which month it originated in.
- 2Pay the difference or negotiate a written deduction agreement with the employee.
- 3Recalculate statutory contributions, adjust the payroll sheet, and submit amended reports.
When to call an accountant
For errors dating back further than one tax period, for higher amounts, and whenever the employee disputes the correction.
Frequently asked questions
- Can I deduct an overpayment from the next salary?
- Only in exceptional statutory cases or based on a written deduction agreement. Otherwise, no.
- How long do I have to recover an overpayment?
- The general limitation period is three years, although it is calculated differently for certain claims. It is best to act quickly.
- Does the correction have to be in writing?
- A deduction agreement must be in writing. For other corrections, written documentation is strongly recommended.
Sources
Author: FinTaxo expert team
Operated by: Zaklipso s.r.o.
Information valid as of: 17 August 2026
Czech original: read this article in Czech
This article is general information and does not replace individual tax, accounting or legal advice. Czech legislation changes frequently — verify the current wording or discuss your situation with us before acting on it.
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