This chapter deals with state law provisions identifying, establishing, and collecting overpayments. All states have provisions addressing these matters.Under the FLSA, employers are able to deduct the full amount of any overpayments from their employees. If you pay an employee more than they should have received in a pay period, you need to know how to correct a payroll overpayment. I overpaid my estimated taxes. How do I apply for a refund? If direct deposit was mode of pay, your bank could withdraw the amount from your account and return the overpayment to your former employer.