Posting a Negative Gross Payroll and PAYG Adjustment

Mark CusworthMark Cusworth Member Posts: 11
edited September 9 in Accounts Business Range
I need to adjust an employee salary in one transaction. Their gross needs to be less and reverse the PAYG applicable.

I have tried to perform a payroll with a negative gross which is achievable with one negative hour however it won't let me negatively adjust the PAYG (so take PAYG away rather than increase it).

I also need to STP the adjustment to the ATO once done.

Can anyone assist with a solution please.

Comments

  • Teagan UttridgeTeagan Uttridge Member Posts: 2
    edited June 24
    do you mean that the pay overall will be a negative? 
  • Mark CusworthMark Cusworth Member Posts: 11
    edited July 15
    Yes, that’s correct.
  • Acctd4Acctd4 Accredited Partner Posts: 895 ✭✭
    edited June 24

    Hi Mark

     

    What’s the specific scenario here?

    Have you already paid the/any net amount to the employee?

     

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    0422 886 003

    [email protected]

    www.accounted4bs.com


    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    0422 886 003

    [email protected]

    https://www.accounted4bs.com/

  • John GraetzJohn Graetz Member Posts: 1,652 ✭✭
    edited June 25
    Mark, I am not quite clear on what you are trying to do, but it is not possible to have a pay that has a negative gross nor is it possible to have a tax figure which is less than zero, as far aw I am aware.  The only other way that you could do it would be to change the original pay to what it should have been and then have the employee pay you the difference.  That of course will change all of your payroll reports etc and your STP lodgement.  This is all possible as I have done this before.  It is messy, if you really want to do it this way.  The other way is to spread the adjustment over say two pays if it cannot be incorporated into the next pay run.
    John L G
  • Mark CusworthMark Cusworth Member Posts: 11
    edited June 25
    Hi Shaz,

    I have used an incorrect hourly rate to pay an employee all year (weekly payrolls where the employee was paid). I have agreed with the employee to have the excess payment for the year refunded.

    I would prefer to put through one bulk entry to reverse the overpaid gross amount and lower the PAYG accordingly. I need this to go through to the ATO via STP of course. This is in preference to adjusting over 50 pays individually.

    I have tried to perform a negative pay run which seems to work for the negative gross if I use a minus in the hours however it will not let me adjust the PAYG as if it was being added rather than deducted.

    Can this be done?

    Regards,

    Mark


  • Mark CusworthMark Cusworth Member Posts: 11
    edited June 25
    Hi John,

    Not keen on individual adjustments due to the number of pay runs involved, also I want this corrected before year end so can't spread over future pays.

    The rest of the details are as per my comments below.

    Regards,

    Mark
  • Glenda VealeGlenda Veale Member Posts: 173
    edited July 15
    Not possible to do a negative pay as John mentioned above.  I would want to alter each pay as then the records of hourly rate would be correct in the employee information.  Understand this would be some work but suggest it is the correct way.  The new gross will also affect the super that is payable, so a reduced amount will be due for June.
  • John GraetzJohn Graetz Member Posts: 1,652 ✭✭
    edited June 25
    Glenda.  That would be a nightmare as you also consider that this would change information that has previously been lodged on Business Activity Statements.  That is apart from payroll adjustments which would have to be made through the general ledger and the fact that this would also change bank account related information.
    Mark.  What sort of amounts are involved here with the pay adjustment and the tax adjustment?  
    John L G
  • Mark CusworthMark Cusworth Member Posts: 11
    edited June 25
    Hi John,

    The gross salary adjustment is just over -$7,000 and PAYG adjustment just under $2,000.

    Regards,

    Mark 
  • John GraetzJohn Graetz Member Posts: 1,652 ✭✭
    edited June 25
    Mark.  This adjustment is also going to affect SGC payments throughout the year.  What has been the gross pay over say each of the past pays for this month and is there enough there to be able to claw back your adjustment amount?  If you can do retrospective adjustments for the pays in this month to recover the overpayments, you will have a much simpler path to have to travel.
    John L G  
  • John GraetzJohn Graetz Member Posts: 1,652 ✭✭
    edited June 25
    Mark.  You can ring me on 0428 695454 if you want to talk over some strategies here.
    John L G
  • Mark CusworthMark Cusworth Member Posts: 11
    edited June 25
    John, I would need to go back to February pay runs from now and zero them to be able to adjust to the amount required. I have paid the super and BAS up to the end of March 2020.

    Mark
  • Mark CusworthMark Cusworth Member Posts: 11
    edited June 25
    Hi All,

    I have a solution from John.

    Thank you all for your assistance.

    Regards,

    Mark 
  • tjosephtjoseph Member Posts: 29
    edited September 9
    Hi there,  We have a similar problem to Mark where we have incorrectly paid JK to some employees and now we need to correct this and we are unsure how. We would love some assistance?

    Mark - what was your solution?

  • Mark CusworthMark Cusworth Member Posts: 11
    edited September 8
    Hi, I learnt that you cannot process a negative pay in Reckon. Not sure what to suggest given you reversing incorrectly paid JK payments. Sorry
  • Acctd4Acctd4 Accredited Partner Posts: 895 ✭✭
    edited September 9

    tjoseph

    What’s the scenario in terms of recoupment?  Is the employee repaying it back to you?

     

     

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    0422 886 003

    [email protected]

    www.accounted4bs.com


    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    0422 886 003

    [email protected]

    https://www.accounted4bs.com/

  • Mark CusworthMark Cusworth Member Posts: 11
    edited September 9
    Hi Shaz, yes, the employee is paying it back
  • Acctd4Acctd4 Accredited Partner Posts: 895 ✭✭
    edited September 9

    Perfect!

     

    • Simply edit the applicable Pay(s) to remove the JK component or - if JK is the only amount being paid - delete the Paycheque(s)   

    Note: To edit, you need to open the Paycheque & select the “Unlock Net Pay” radio button.  This will generate an automatic warning which is fine – Just click on OK to close it.

     

    • Create a Write Cheque to the particular employee (Again, you can ignore the Payroll warning) – Make sure you use the same Employee name from your Employee list.

               Post the incorrect amount that you paid the employee to your applicable Gross Wages (or JK) expense account.  Leave the tax code BLANK

                Write a relevant Memo (copy this to both Memo fields)

     

    • Upon repayment by the employee, simply enter a Make Deposit (using the same Employee name in the Received From column) directly back to the same payroll expense account (in the From Account) to offset/bring it back to $ 0.00 again.  Again, it’s a good idea to enter a relevant Memo … in both Memo fields.

     

    Tip: It’s an annoying, long-term glitch that the payee name automatically drops out on a stand-alone Deposit.  (If you check the transactions under the applicable employee name, you’ll see the Chq is there, but not the Deposit!)

    • To remedy this, go to your applicable bank account register eg double-click on the bank account in your Chart of Accounts

              (If not already ticked, tick the “1-Line” checkbox to summarise the display)

    • Go to the applicable Deposit transaction line & enter/select the applicable Employee name again in the Payee field then click on Record or OK to update/save.  Go back to your applicable employee & you’ll see the Deposit is now displaying.

     

    What the above process does ….

     

    • Corrects the Employee’s YTD balances by the correction/deletion of incorrect paycheque
    • Correctly creates the transaction reflecting your payment to the Employee (without impacting payroll at all)
    • Correctly reflects the reimbursement paid back by the employee, deposited into your bank account (again, not impacting Payroll)
    • Correctly displays these transactions under your applicable employee’s transaction list.  Note:  Although displayed under the employee, these transactions will NOT affect Payroll – only Payroll-specific transactions are included in that

     

    If the employee is paid regularly (eg each pay run), their next Pay will update their YTD figures in that next STP submission.

    If the employee is not being paid again, you can do an specific STP Update Event if you really want to but your “Finalise Year” STP submission will update the YTD balances correctly.

     

     

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    0422 886 003

    [email protected]

    www.accounted4bs.com

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    0422 886 003

    [email protected]

    https://www.accounted4bs.com/

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