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Overpayment of Wages

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Newbie

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A casual employee was mistakenly paid for a shift that wasn't worked ~$500. I processed the correction in Xero and filed it through STP. I then sent them the payslip showing the correction in wages. We wrote to the person explaining the overpayment and requested it be repaid, and gave him some options. An invoice was then sent for the amount owing, with again some options offered and an opportunity to discuss it. Aside from not being able to lawfully deduct monies from wages without an employees express permission, they have ceased all contact with us and will not respond to phone calls, emails or letters. This person has a full-time position elsewhere and was doing additional work for us in his off-time.

As a result our report to the ATO will show a deduction against that employee's earnings, but as they have not repaid it they have actually received more income that will be reported. Therefore the Payment Summary will ultimately be incorrect.

Do I reverse the overpayment of wages given the funds were never repaid?

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Most helpful response

ATO Certified Response

Former Community Support

Replies 0

Hi @McSmith86,

 

Thanks for getting in touch!

 

Where there is no future payment to the employees YTD amounts it should be reduced to reflect the overpayment through an update event.

 

You can find further information on our website, alternatively you can phone us on 13 28 66 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.

1 REPLY 1

Most helpful response

ATO Certified Response

Former Community Support

Replies 0

Hi @McSmith86,

 

Thanks for getting in touch!

 

Where there is no future payment to the employees YTD amounts it should be reduced to reflect the overpayment through an update event.

 

You can find further information on our website, alternatively you can phone us on 13 28 66 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.