I was overpaid about 5500 gross this year, and have been asked to repay Net 3800.
I have done this now, but am unclear how to treat this income in my stated earnings this upcoming tax return .
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2,426 views
1 replies
Hiya @Totara1000 👋
Your employer should have corrected your income that they report to the ATO each pay through Single Touch Payroll. Did you have a look at your ATO Income Statement to see if the YTD amounts reported reflect the reduction of the $5,500 overpayment?
For example, if you were paid 2,000 per fortnightly pay, then the YTD amounts would be 2,000, 4,000, 6,000 etc each subsequent pay that they report to the ATO. When the overpayment was discovered, your employer is obliged to correct the YTD income they've reported in the next pay they send.
For example, if the YTD amount was 44,000 before they discovered the overpayment and you would have been paid another 2,000 that pay, then the next STP report would be (44,000 + 2,000 - 5,500) = 40,500. The tax would have been adjusted, which is why you only needed to pay back the net (gross less tax) amount.
The ATO provides employers with detailed instructions about what they must do for overpayments that are discovered in the SAME FY that the overpayment occurred (different process for prior FY). Speak to your employer and, if they haven't adjusted your YTD income with the ATO via STP, then provide them with this ATO guidance.
Deanne
All replies
Hiya @Totara1000 👋
Your employer should have corrected your income that they report to the ATO each pay through Single Touch Payroll. Did you have a look at your ATO Income Statement to see if the YTD amounts reported reflect the reduction of the $5,500 overpayment?
For example, if you were paid 2,000 per fortnightly pay, then the YTD amounts would be 2,000, 4,000, 6,000 etc each subsequent pay that they report to the ATO. When the overpayment was discovered, your employer is obliged to correct the YTD income they've reported in the next pay they send.
For example, if the YTD amount was 44,000 before they discovered the overpayment and you would have been paid another 2,000 that pay, then the next STP report would be (44,000 + 2,000 - 5,500) = 40,500. The tax would have been adjusted, which is why you only needed to pay back the net (gross less tax) amount.
The ATO provides employers with detailed instructions about what they must do for overpayments that are discovered in the SAME FY that the overpayment occurred (different process for prior FY). Speak to your employer and, if they haven't adjusted your YTD income with the ATO via STP, then provide them with this ATO guidance.
Deanne
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