Duplicate payment made on 1 employee wages and employee reversed the second payment back, how to clear this off the banking review and what action do I need to take on payroll side?

Let's get this fixed, Poolmagi.

First, we'll have to delete or rollback the payroll since we have created a duplicate payment or check. Refer to these articles depending on your payroll subscription:

• Deleting a pay run in QuickBooks Online Standard Payroll
• Delete a Pay Run in QuickBooks Online Advanced Payroll

Next, you can recreate the payroll, and resubmit the FPS to HMRC. Let me share the articles that can help you:

• Pay your employees in QuickBooks Online Standard Payroll
• Create a New Pay Run on QuickBooks Online Advanced Payroll
• Submit FPS to HMRC in QuickBooks Online Standard Payroll (UK)
• Lodging FPS to HMRC in QuickBooks Online Advanced Payroll

Once done, you can exclude the transaction on the banking review page. This way, it'll not be added to the program. 

Then, you can continue categorising the other transactions.

If there's anything else that you'd like to know, please feel free to leave a comment below. Take care!