Handling Employee Overpayments - Australia

Handling Employee Overpayments will depend on agreements with the employee and would typically fall into two scenarios:

1. Employee wants the overpayments to be recovered in future pays

2. Employee refunds the company with the overpaid amount.

Scenario 1 - Employee wants the overpayments to be recovered from future pays

1. Open a Manual Pay in PayGlobal to adjust the overpayment. We generally recommend addressing this issue through a manual pay. This approach is beneficial for reporting purposes and allows you to match the accumulators with the initial overpayment.

2. In the manual pay’s transaction view, press Ctrl+A to open the Sequence Header and make sure that the accumulators are aligned to those of the Standard pay in which the overpayment occurred.

3. Put though the adjustments by adding the exact same allowance that has been overpaid but with negative quantity/amounts.

4. Process and Close Pay.

5. Submit the related Pay Event generated by the manual pay

6. To reflect the recovery on future pays, create a Post Tax Deduction item where you want to post the recovery amount to. This deduction item will need to be included in future pays to reflect the agreed recovery amount.

Scenario 2- Employee refunds the company with the overpaid amount

1. Follow Steps 1-5 in Scenario 1

2. Recovery of the overpayment is made outside of the system

Overpayment in a previous financial year

If you overpay a payee in a previous financial year and realise in a later year, you can't recover the amount withheld from the payment from the ATO. The employee will have to repay the overpaid amount to you. They will need to repay the gross amount, which includes:

• the overpaid amount received

• any tax amount withheld.

If the overpayments being adjusted is for the previous FY and has already been finalised:

1. Submit a refinalisation for the employee using the steps outlines in the help topic below: Re-finalising single touch payroll

2. You will need to do a Rebuild Accumulator to bring back this employee’s YTD to the current year. Steps on Rebuilding Accumulator is on this help page: Rebuilding accumulators