Overpayment on Tax

Donna0308

Hello,   We have accidently overpaid our employees with tax and need to adjust it.

The original rate we offered them included tax & super but didn't pick this up until later. Super has been sorted but still having issues with tax.  An adjustment was done which fixed the tax but is showing up in nett pay to them when it shouldn't.  From what I can see I should link to a no reportable deduction and link to an expense account - is this correct.?  Any suggestions appreciated. 

Princess_R

Hi @Donna0308,

 

That’s an easy mistake to make, and it can happen sometimes. Usually, fixing an employee overpayment is done either by adjusting their next pay or by processing a separate pay for the correction, but it can depend on the employee’s situation as outlined in this guide.

 

Changing the tax manually without also adjusting the gross wages can throw out the pay slip and may show an incorrect net pay. I’d strongly recommend speaking with your accountant for tailored advice on the best way to handle the correction and how it should be reported.

 

Cheers,

Princess