Loading
This thread is archived and the information may not be up-to-date. You can't reply to this thread.
_Redmond8(Newbie)Newbie
22 May 2021

Good eveining,

I was underpaid rates of pay and made a request for payment of underpaid rates of pay from a labour hire agency I had not worked for since November 2020. (my rates of pay was underpaid by $0.38 per hour for a period of 5 months)

I received a payslip for the underpayment

Qty 1 x $300 lump sum payment

Total super paid = $0

Total taxation on payslip = $0

The payments relate to pay periods where I earned over $450 per week so should tax have been applied to the amount?

1,772 views
1 replies
1,772 views
1 replies

Most helpful response

Most helpful reply

BlakeATO(Community Support)Community Support
24 May 2021

Hi @Redmond8

Their withholding sounds correct if you're an Australian resident for tax purposes.

When back payments are made, your payer generally follows the process of working out your annual estimated yearnings (based on what you've earned so far). They then add that extra payment to that figure, and withhold from that as though the back payment was spread out evenly across the year. This means your earnings in this financial year spread across the full year likely did not exceed the tax-free threshold. This will be why no tax was withheld from the amount.

The reason super will not have been paid will be due to not meeting the requirements to be eligible for super guarantee in this calendar month. Currently, you must be paid more than $450 gross in a given month to be eligible for super. It's based on when you're actually paid, not when the payment is made to you. For super guarantee purposes, you've been paid $300 in May, which means you're not eligible for superannuation on that amount.

You can read the tax table for back payments and working out if your employer has to pay super on our website.

All replies

Most helpful reply

BlakeATO(Community Support)Community Support
24 May 2021

Hi @Redmond8

Their withholding sounds correct if you're an Australian resident for tax purposes.

When back payments are made, your payer generally follows the process of working out your annual estimated yearnings (based on what you've earned so far). They then add that extra payment to that figure, and withhold from that as though the back payment was spread out evenly across the year. This means your earnings in this financial year spread across the full year likely did not exceed the tax-free threshold. This will be why no tax was withheld from the amount.

The reason super will not have been paid will be due to not meeting the requirements to be eligible for super guarantee in this calendar month. Currently, you must be paid more than $450 gross in a given month to be eligible for super. It's based on when you're actually paid, not when the payment is made to you. For super guarantee purposes, you've been paid $300 in May, which means you're not eligible for superannuation on that amount.

You can read the tax table for back payments and working out if your employer has to pay super on our website.

Loading
Taxes on backpay? | ATO Community