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Community > AU Payroll >

AU Payroll - Overpayment of Final Pay

Started by Honeylette Chan -   in AU Payroll

HI Everyone

I overpaid an employee for a fortnight because i did not know that the employee was already resigned. I did not pay her her annual leave credits yet.

I'm planning to process her final pay and make adjustments for the overpayment. I would like to ask the proper treatment to correct the erroneous pay run. Should I reverse it? Or add a reimbursement line for all the difference in the net pay as of date to the new pay run (the one which will include her leave credits pay). If its the second option, I do not know how to adjust the PAYG and Super component of the erroneous pay run

Thanks!.
The first thing that you need to do is discuss it with the employee and get their permission to deduct the overpayment from their final pay. It is illegal to make deductions from an employees pay without their prior approval. If they decline then you need to seek legal advice to recover the funds. You can't withhold their unused annual leave.
See the below link to fair work which explains this.
https://www.fairwork.gov.au/pay/deducting-pay-and-overpayments
 

Sarah Tolhurst