PAYG Tax withheld from pay incorrect

  • 2
  • Question
  • Updated 5 years ago
  • Answered
  • (Edited)
I have incorrectly worked out a staff members tax withheld.  How do I go about fixing it, so they get paid correctly & it doesn't stuff up my accounts come year end?

The gross pay is correct, just the tax - so we owe them money (withheld too much tax).

Thanks.
Photo of Felicity Van

Felicity Van

  • 1,348 Points 1k badge 2x thumb

Posted 6 years ago

  • 2
Photo of John G

John G, Information Support Analyst

  • 27,510 Points 20k badge 2x thumb
Official Response
Hi Felicity,

Welcome to the Reckon Community

You'll need to modify your pay transaction by reducing the tax amount to the correct amount and adding a deduction for the amount of the difference so that the total of Net Pay remains the same.  You can then clear the deduction with a cheque or deposit to the employee's bank account. 

Regards,
John



Photo of Kevin V. Russell

Kevin V. Russell, Accredited Partner

  • 5,580 Points 5k badge 2x thumb

Hi Flick. You shouldn't have to "work out" the tax. If you use the correct withholding scale, the Reckon software will do all the work for you. You must ensure all of the detail on the Income Tax Installment Declaration is filled out. Pay particular attention to the HELP question because and also if the employee is claiming the tax free threshold elsewhere.



Photo of Felicity Van

Felicity Van

  • 1,348 Points 1k badge 2x thumb
Thanks Kevin - hate "flick!" lol

it was  a one off scenario - & not as simple as ticking the right boxes...
Photo of Kevin V. Russell

Kevin V. Russell, Accredited Partner

  • 5,580 Points 5k badge 2x thumb

My profuse apologies Felicity. That won't happen again. Have a great day.
Photo of SusanR

SusanR, Accredited Partner

  • 1,938 Points 1k badge 2x thumb
Hi Felicity,

Another tip - make sure that you have the correct tax code on the employee record so in future Accounts withholds the correct amount.  A description of each tax code can be found from the drop down menu Employees and then choosing  Tax Table Information > Tax Table Info > Key for Tables.

I hope this also helps.

Sue
Photo of Felicity Van

Felicity Van

  • 1,348 Points 1k badge 2x thumb
Thanks John,

Sorry, I'm still a little confused...

When you say "adding a deduction..." what sort of deduction? Do I need to set up another payroll item for this? & if so, what account do I post it to, so that it doesn't affect my accounts too much?

Sue - my issue was that this was a "one off" payment, so the tax was a little different to work out, but thanks for you help too!

Regards,
Felicity 
Photo of John G

John G, Information Support Analyst

  • 27,510 Points 20k badge 2x thumb
Hi again Felicity,

Yes, set up another payroll item of Deduction Type and set it to a Payroll Liabilities account.  Then use the Employees > Payroll Taxes and Liabilities > Create Custom Liability Payments option to pay out the refund. 

Regards,
John

Photo of Felicity Van

Felicity Van

  • 1,348 Points 1k badge 2x thumb
Excellent - thank you so much!
I'm so glad I found this site... :-)
Photo of Heather

Heather

  • 298 Points 250 badge 2x thumb
Why wouldn't Felicity be able to just change the tax amount manually in the pay cheque window?
Photo of Kevin V. Russell

Kevin V. Russell, Accredited Partner

  • 5,580 Points 5k badge 2x thumb

You can change the amount manually every week but it is not recommended. What happens if you forget? What happens if you are not around to run the pays? No, it is far preferable to get the information right on the Employee card and let the software do the work. It's what it does best. You can always check the tax using the TWC on the ATO website but you shouldn't need to.



Photo of Heather

Heather

  • 298 Points 250 badge 2x thumb
Yes but I think it was a one off payment Felicity was talking about.
Photo of Felicity Van

Felicity Van

  • 1,348 Points 1k badge 2x thumb
yes, it was a one off payment.
not a usual pay also.  So the tax (even though everything is set up correctly) is incorrect.

We pay employees fortnightly - this was for a casual on a "project based" contract - with a full lump sum at the end of the contract.  

I have to work out correct tax as well for termination payments as the software doesn't pick it up correctly.  It's not a big deal.

What John told me to do, worked & I'm grateful for the help :)
Photo of Kempsey Race Club

Kempsey Race Club

  • 82 Points 75 badge 2x thumb
This reply was created from a merged topic originally titled
PAYG Adjustment.


An employee was overtaxed for a number of weeks.I have since paid back to the employee the amount he was overtaxed. How do I enter this into his payroll records. Payroll won't let me enter a positive PAYG amount

This conversation is no longer open for comments or replies.