Loading
Dave.m(Initiate)Initiate
25 Mar 2026

Hi all, looking for guidance on a difficult payroll situation with a former employer.

Background:

  • I was a permanent full-time employee at a small private company for 14 year and I was the sole remaining employee
  • After the bookkeeper left in Jan 2025, my employer stopped issuing payslips and stopped lodging STP entirely
  • I continued receiving net fortnightly pay into my bank account, but no payslips and no STP reporting
  • My FY25 income statement on the ATO portal is still Not tax ready, showing only approximately half my actual annual salary
  • I raised this many times throughout 2025 but my boss kept making excuses such as not being able to log in to MYOB
  • I resigned in January 2026 and have since been unable to reach my employer by phone

My question:

When lodging my FY25 return, which figures should I use:

  1. Net amounts deposited into my bank account
  2. Full gross salary showing from employment contract
  3. The reported half via STP + net deposits for the unreported half

My concern is that PAYG was withheld from my gross pay each fortnight by my employer, but was never reported or remitted to the ATO for the second half of FY25. So there is no withholding credit showing on my ATO record for that period.


Does this mean I would be taxed again on income that tax was already deducted from? Or can my accountant include estimated gross wages and PAYG withheld for the unreported period, supported by bank statements, even though the employer has not finalised STP?


Any guidance from ATO staff or others who have been through this would be really appreciated. Thank you.

120 views
8 replies
120 views
8 replies

All replies

YellowPotato(Taxicorn)Taxicorn
25 Mar 2026

  1. No, net wages is not the same as gross wages with PAYG withholding
  2. No, your annual salary on contract would be close but doesn't necessarily mean that is the gross wages for that year and then may have difficulty figuring out PAYG withholding
  3. No, same problem again net wages is not the same as gross wages with PAYG withholding


Ask your tax agent, they should be able to estimate your gross wages and payg withholding using the existing payslips + PAYG withholding tables + the net wages you have received.


You may do a tip-off to ATO for not reporting STP and possibly to FairWork Australia as well for not getting payslips


It's the employer's responsibility to be withholding, reporting and paying the PAYG withholding to ATO

Dave.m(Initiate)Initiate
25 Mar 2026

Thank you, that confirms the method (use payslips that i have + ATO withholding tables + net bank deposits to reconstruct gross wages and PAYG). My concern is whether the reconstructed PAYG credit will actually be accepted by the ATO, given the employer never remitted or reported it. Can I assume that I should be entitled to the PAYG credit even without the employer finalising STP? The risk is the ATO may query it and we may need to formally dispute it.


YellowPotato(Taxicorn)Taxicorn
25 Mar 2026

given the employer never remitted or reported it.

  • You can't assume the 'never remitted' part unless you are doing their books
  • Generally, activity statements can be submitted via ATO online service and then they pay it

Can I assume that I should be entitled to the PAYG credit even without the employer finalising STP?

NikkiATO(Community Moderator)Community Moderator
25 Mar 2026

Hi @Dave.m,


If it’s not possible to obtain corrected info from your employer, you don’t need to delay lodging your return. Working with your accountant to lodge using the best info available, and keeping supporting records such as bank statements, contracts and payslips, is the appropriate way to move forward. These figures are based on records and established pay patterns, rather than assumptions. You can also use our Gross pay estimator to estimate your gross pay (income before tax) based on your net pay (take home pay) for the financial year.


Your former employer has their own separate reporting obligations under STP and for remitting PAYG withholding. If those obligations haven’t been met, we may make further enquiries as part of their compliance processes. This doesn’t stop you from lodging your return or claiming the PAYG credits you’re entitled to.

Liked by Dave.m
Dave.m(Initiate)Initiate
25 Mar 2026

Thank you, that’s very helpful.


Just to confirm one point before I lodge:

  • I have my employment contract showing my annual salary, and it stayed the same for all of FY25
  • I have payslips for the first half of FY25 showing the exact gross wages and PAYG withheld each fortnight
  • My bank statements show the same net pay continued in the second half of FY25
  • My employer only reported the first half of FY25 through STP

Given the salary and pay pattern did not change, can my accountant use the first-half payslips and contract to apply the same gross wage and PAYG withholding to the unreported second half, and claim the full-year PAYG credit on that basis?

KaraATO(Community Support)Community Support
26 Mar 2026

Hi @Dave.m,


Even where your salary and pay pattern didn’t change, your accountant can’t claim PAYG withholding credits for the unreported second half of FY25 unless those amounts have been reported to us by your employer.


While payslips, your contract, and bank statements can support estimates of income, PAYG withholding credits are only created when your employer reports those amounts through STP or lodges a PAYG payment summary annual report. Without that reporting, the PAYG withheld for the unreported period won’t be available to claim in your tax return.


Your employer is required to report the full year’s income and withholding. You’ll need them to report the outstanding period before the full‑year PAYG credit can be applied.

Liked by Dave.m
Dave.m(Initiate)Initiate
26 Mar 2026

@KaraATO @NikkiATO

Thank you for the clarification. So to confirm my understanding, if my employer has not reported the second half of FY25 through STP, I would need to lodge without that PAYG credit, pay the resulting tax shortfall upfront, and then dispute to recover it once the employer fixes their reporting.


My concern is: what if my former employer becomes insolvent or simply does not have the funds to pay the SGC or fix the STP reporting? In that scenario, am I permanently unable to recover the PAYG credit for wages that were genuinely earned and taxed at the source?


Is there any mechanism the ATO has to protect employees in this situation, for example, directly crediting the withheld PAYG based on the employee's own evidence (payslips, contract, bank statements) rather than requiring the employer to report first?

Thank you.

Liked by Dave.m
KaraATO(Community Support)Community Support
26 Mar 2026

Hi @Dave.m,


Without that reporting, the PAYG credits can’t be applied. This is the case even if the employer later becomes insolvent or can’t meet their obligations.


Where an employer corrects or finalises their reporting at a later date, you can request an amendment to your tax return (or lodge an objection if the amendment time limit has passed) so the PAYG credits can be applied then.


If they haven't met their employer and business obligations to report or pay PAYG withholding or super, we manage this directly with them through our compliance processes.


For issues with employer/s reporting wages, PAYG withholding, or paid super correctly, you can:

These actions allow us to follow up with the employer, but they don’t change how PAYG credits are applied to individual tax returns.


If you’re still unsure how lodging your return with un-finalised employer info may affect you, or what further options are available in your circumstances, you can contact our tailored technical assistance team team for further guidance.

Featured articles

How to work out your tax residency

15 Apr 2026 · 8 min read time

Finding your TFN

6 Feb 2026 · 4 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)

    3107 likes

  2. Taxduck

    (Taxicorn)

    2104 likes

  3. PayrollDeanne

    (Taxicorn)

    837 likes

  4. YellowPotato

    (Taxicorn)

    545 likes

  5. knaresbro

    (Devotee)

    368 likes

Top contributors

  1. Bruce4Tax

    (Taxicorn)

    9645contributions

  2. Taxduck

    (Taxicorn)

    4811contributions

  3. PayrollDeanne

    (Taxicorn)

    2044contributions

  4. YellowPotato

    (Taxicorn)

    1382contributions

  5. YEP

    (Devotee)

    836contributions

Loading
FY25 income only half reported, employer won't fix STP, how do I lodge my tax return correctly? | ATO Community