Temination payment
Emma_10100757
Member Posts: 11 Novice Member 
Hi Everyone, may I seek some helps on this please? We made an employee redundant in July. These days she found out that I have withheld the wrong tax amount on her unused annual leave plus leave loading - which should be a flat rate 32% under "genuine redundancy", however, I mistakenly calculated by using the marginal rate thus I ended up withholding $80 more than it should be. Now she requests to get this amount pay back. My question is: how & what to do to fix the records in Reckon (we are using Reckon Accounts Premier 2019 version) as well as reporting to ATO?
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Comments
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Can’t you adjust the pay and then submit a replacement file to ATO. And pay her the extra 800
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Hi Kris, the payroll was processed in July and PAYG also has been submitted to ATO for that month. I don't think adjusting pay will do any help because the amount she's paid on unused AL and leave loading is correct itself, only affecting the tax withheld. I suspect something to do with Employee/Payroll taxes and liabilities adjustment. Thank you!
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Hi Emma
If more tax has been withheld than necessary, this will be reflected in their PAYG total at EOFY & the employee will have it refunded when they do their 2020 tax return.
However, bear in mind that for a genuine redundancy, the job itself must be redundant/no longer applicable.
If the employee was just let go/terminated, this is not considered a "redundancy" & no tax-free limit applies.
For a genuine redundancy only, any amount above the tax-free limit should be processed as an ETP (Employment Termination Payment)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
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Further to your comment, adjusting the pay would only be a tax change and that way you could refund the 80 to employee. Then resubmit to ATO0
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Thank you Shaz! It would be simple if she could just wait till tax return...
Thanks Kris! Now I got you - just amend the PAYG amount from the pay.
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