Loading
This thread is archived and the information may not be up-to-date. You can't reply to this thread.
gordonc(Initiate)Initiate
23 May 2022

We have overpay an employee in Sept - Nov 21 in a total of 11155.3 (excluding super) and therefore overpaid the PAYG in the amount of 2456. We made the PAYG payment monthly and the employee repaid the net amount of overpayment to us ( 11155.3 - 2456 = 8699.3).


The employee resigns this month and have the last payment in the amount of 1799.24 (excluding super).

The question is :

  1. May I ask is it okay if I not withholding any PAYG for this Employee in this month ?
  2. Is it ok if I just amend the reported income via STP reporting? We are currently using STP phase2. I will deduct the reported income and PAYG by 11155.3 and 2456 respectively and added back income of 1799.24.
  3. any follow up action is required?


532 views
2 replies
  • Avatar of woman with short light brown hair
Liked by PayrollDeanne
532 views
2 replies

Most helpful response

Most helpful reply

PayrollDeanne(Taxicorn)Taxicorn
25 May 2022

Hi @gordonc


You have done the right corrections. As per this long-standing ATO website guidance, if you discover an overpayment in the same FY as the initial payment, you recover the PAYGW in the current FY and adjust the reporting to the ATO for the gross amount and PAYGW (as you've recovered it). They have great examples here and they are very clear and concise, easy to follow and understand.


There may be fringe benefits tax on the overpayment, you should refer to the always-handy Fringe Benefits Tax - a guide for employers, Chapter 8.


I hope that helps - Deanne

All replies

Most helpful reply

PayrollDeanne(Taxicorn)Taxicorn
25 May 2022

Hi @gordonc


You have done the right corrections. As per this long-standing ATO website guidance, if you discover an overpayment in the same FY as the initial payment, you recover the PAYGW in the current FY and adjust the reporting to the ATO for the gross amount and PAYGW (as you've recovered it). They have great examples here and they are very clear and concise, easy to follow and understand.


There may be fringe benefits tax on the overpayment, you should refer to the always-handy Fringe Benefits Tax - a guide for employers, Chapter 8.


I hope that helps - Deanne

gordonc(Initiate)Initiate
25 May 2022

Thank you for your kindly reply @py_deanne. I see the follow up actions will be two parts : 1. recover the PAYG in current FY. May I ask exactly how to recover the PAYG our company already paid ? Is it via reporting the overpay amount as Fringe Benefit when submitting single touch payroll (STP phase 2). Or I simply use the overpaid amount to offset the PAYG payment ? that means assume i need to submit 10000 of PAYG for may 2022 payroll, i use the 2456 to offset such that i only pay 7544 toATO ?


Another part will be "to adjust the reporting to the ATO for the gross amount and PAYGW (as you've recovered it)" can i simply adjust it via next payroll run's STP payroll submission ? or i need to report STP of each affected month ? And any other document submission is/ are required ?


Thank you for your answer again.




Featured articles

Tax tips for managing your side hustle

22 Apr 2024 · 6 min read time

Tax on gifts and inheritances

15 Apr 2026 · 5 min read time

How much tax should I pay on a second job? Claiming the tax-free threshold

15 Apr 2026 · 4 min read time

Top liked users

  1. Bruce4Tax

    (Taxicorn)

    3260 likes

  2. Taxduck

    (Taxicorn)

    2068 likes

  3. PayrollDeanne

    (Taxicorn)

    816 likes

  4. YellowPotato

    (Taxicorn)

    529 likes

  5. knaresbro

    (Devotee)

    364 likes

Top contributors

  1. Bruce4Tax

    (Taxicorn)

    10399contributions

  2. Taxduck

    (Taxicorn)

    4760contributions

  3. PayrollDeanne

    (Taxicorn)

    2061contributions

  4. YellowPotato

    (Taxicorn)

    1352contributions

  5. YEP

    (Devotee)

    837contributions

Loading
Overpayment to an employee | ATO Community