Not enough tax has been taken from Leave Loading. How can I fix this?

Question

I have not taken enough tax from Annual Leave Loading and Annual Leave for two of my employees. How do I fix this before the end of the financial year?

Tracey_H · Answer

Hi @neleh10a

If you haven't withheld enough PAYG the amount that should have been paid to the ATO was paid to the employee instead. This means that you would have to reduce the employee's net amount to fix the previous overpayments.

You would need to discuss with the employee whether they would prefer to have their net pay reduced or wait until they lodge their tax return.

Please let me know if you need further help.

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neleh10a · Answer

How can I do this without altering the ordinary weekly net pay.

Tracey_H · Answer

Hi @neleh10a

Thanks for your post. From a software perspective, if you have another pay to process for the 2021-2022 financial year you could withhold extra PAYG. However, you would need to discuss this with your employee before doing so.

Please let me know if you need further help.

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.