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Vivian_Zhang028(Initiate)Initiate
6 June 2024

Hi there, please help me to clarify the following matters:


1.Meal deduction: We provide employees with meal cards, valued at $100 each. If we want to deduct this amount from their wages, would it be a pre-tax or post-tax deduction?


2.Uniform and staff training fee: If employees need to purchase uniforms or pay for third-party training organized by the company, and we want to deduct these costs from their wages, would it be a pre-tax or post-tax deduction?


Claw back of overpayment: If we accidentally overpay an employee (including tax and superannuation), and the employee agrees to have this overpayment deducted from their next paycheck, for example, if we overpaid $300 gross, how should we proceed? Would it be a pre-tax or post-tax deduction?


Thanks very much.

8,513 views
5 replies
8,513 views
5 replies

Most helpful response

Most helpful replyATO Certified Response

PayrollDeanne(Taxicorn)Taxicorn
ATO Certified Response6 June 2024

Hiya @Vivian_Zhang028 👋


Thanks for providing the context to your question.


If you had agreed to provide an option to employees before the purchase of meal cards, that they could salary sacrifice the amounts, then that would have been an option. However, after the event does not qualify for salary sacrifice arrangements, so only post-tax is possible now.


The same goes for the external training.


As per the link I gave you to the ATO guidance, it explicitly advises how to calculate the overpaid amount and has an example that runs through it. In summary of that guidance, if you discover the overpayment in the same FY as you initially overpaid, then the amount of the debt = gross less tax. That may include any post-tax deductions. Superannuation is another matter, as that is paid to a super fund, so is known as a contribution in error and you have to contact the fund to get a refund. STP reporting is corrected when you discover it, as per the ATO STP2 Employer Guidance.


Deanne

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