Combining Multiple Casual Payruns into One Payroll Entry

Question

Hi All,

I have 3 full-time employees and one casual employees all of which are entered into the same payrun on the Payroll App. The full-timers are paid on a monthly basis and the casual on a fortnightly basis.

The process that I have used to enter my pay runs into Payroll is to just clump up to 4 fortnightly casual payments for the casual employee into one entry in the Payroll App. This I have done so that I don't have enter the pay run into the Payroll App on a fortnightly basis - I just align it with the Payroll entries which I do on a monthly basis for the full-time employees.

However, now my casual employee has looked at the Government Portal and it says that she now owes about $5K of additional tax over and above what I have already deducted for tax. I have calculated her tax correctly for each pay run based on her hours worked however pondering this I feel like the ATO (due to clumping multiple casual pay runs into one payroll entry) has thought that she's a part-time or full-time employee - hence the increase payable in her tax.

Should I go back to each pay run, convert to draft, remove the casual employee from the pay run, and then complete an individual pay run for each and every time the casual employee was paid? In doing this, would the ATO then calculate the correct tax to align with the tax that I have calculated and already deducted? Or was I correct in clumping casual pay runs into one Payroll App pay run entry and the ATO have gotten something wrong.

Much appreciation for anyone that can help me.

Kayzak · Answer

Ok, Thanks Rav I'll check all of those items.

Rav · Answer

When you say "is the tax amount sent in your EOFY finalisation the same amount the ATO received" - do you mean as in the tax that I have actually already deducted from the casual employees fortnightly pay over the course of the year?

Correct. STP is reported on a YTD basis only so the amounts that you see in the YTD Summary in the employee profile and/or EOFY finalisation (if you've created one) will be the amounts sent to the ATO.

I need to add I'm not an accountant/tax agent so can't give you specific advice on tax related matters, (for that I'd suggest having a chat with your accountant) however I think the first thing is verifying whether there is something actually incorrect that has occurred.

For example, is the YTD tax balance that the employee is reporting the ATO have received different to the YTD tax balance you have for them in the app via their pay runs etc.

I haven't yet completed the EOFY because I was worried that I would then be unable to go back to make changes if the tax amounts weren't the same

You can make changes/corrections at any time including sending through an EOFY finalisation again if required.

Kayzak · Answer

No I have not confirmed whether the tax is actually incorrect. I'm only going off what my employee had told me. I haven't yet completed the EOFY because I was worried that I would then be unable to go back to make changes if the tax amounts weren't the same.

When you say "is the tax amount sent in your EOFY finalisation the same amount the ATO received" - do you mean as in the tax that I have actually already deducted from the casual employees fortnightly pay over the course of the year?