Handling Employee Overpayments: Practical Steps for Employers (Oct 24 Tax Update)

Relevant For:

Employers with payroll responsibilities.

Key Points:

• Decide whether to recover overpaid amounts; if not, record the decision clearly.
• For past income years, recover the gross overpaid amount directly from the employee.
• Adjust STP to reflect overpayments; the employee will get back any previously withheld tax.
• For current income year overpayments, adjust both gross and tax in STP and recover the net amount.
• Superannuation overpaid can be used to offset future payments for up to 12 months.

Full Article:

Once the rush of the financial year end is over, payroll staff might uncover unintended overpayments made to employees. If this happens, it’s crucial to