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Correct tax payable on underpayment of wages

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Newbie

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I was underpaid on wages from July 1 2018 until recently, and the issue has thankfully been resolved.  I was paid $1290 in backpay but was taxed 33% of this, which is way more than would normally be deducted.  33% is actually my overtime rate of tax, and this certainly isn't for overtime.  Is this amount of tax correct ?  It seems much higher than normal.

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ATO Certified Response

Former Community Support

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Hi @david667

 

Welcome to our Community!

 

If you received a back payment of wages, your employer would have withheld tax based on the Schedule 5 - Tax table for back payments, commissions, bonuses and similar payments and used method A or method B in their calculation. 

 

As @macfanboy advised, when we process your tax return, we'll calculate your tax liability and if too much tax has been withheld during the financial year you'll receive a refund. 

 

Thanks, JodieH. 

 

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Taxicorn

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You are taxed on your expected total yearly earnings, looks like you were taxed as if you made this amount plus your normal earnings every pay period.

 

When you come to lodge your tax return at the end of the financial year, any additional money hopefully will be returned to you increasing your refund.

 

But without knowing the full story it's impossible to be certain.

 

Most helpful response

ATO Certified Response

Former Community Support

Replies 0

Hi @david667

 

Welcome to our Community!

 

If you received a back payment of wages, your employer would have withheld tax based on the Schedule 5 - Tax table for back payments, commissions, bonuses and similar payments and used method A or method B in their calculation. 

 

As @macfanboy advised, when we process your tax return, we'll calculate your tax liability and if too much tax has been withheld during the financial year you'll receive a refund. 

 

Thanks, JodieH.