Employee Wage bounced back into the bank

Create the original (bounced payment) as a Write Chq transaction to the Employee, posting to your Gross Wages expense account. (You can post it to any account - including a Clearing account as Kris suggested - as long as the Deposit also goes back to this same account also) - IMPORTANT: Do NOT enter a tax code, this MUST be left blank:

Then - as per Kris's advice above - enter the return refund via Make Deposit, using the same Employee name & [Gross Wages] account again, to offset it:

A long-term glitch in the system drops out the name on stand-alone deposits, preventing it displaying under the payee's name in lists/reports so go to your bank register & add the ("Payee") name back in there:

Correct the actual Paycheque date to the date it went through (when you re-sent it) & you will then be able to see all the transactions accurately displaying what's happened:

& under the employee name also:

& allows you to account for all entries correctly in your bank rec:

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Change the date of the one in the pay run to the actual payment date (eg to the new financial year)