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Reverse an overpayment and correct STP

This article is for users who have overpaid an employee in Wagemaster.

 
Scenario:
  • An employee was overpaid.
  • They received an incorrect pay slip and money in the bank.
  • The employee is returning the overpaid amount to the company.
  • The pay slip needs to be deleted and the correct values re-entered to reflect the correct Net Pay.
Issue:
  • As the EFT file has been created and the STP pay event has already been reported to the ATO, deleting the pay slip is not an option.
Resolution:
  • The only way to correct the employee’s YTDs is to do a supplementary pay slip to reverse the gross, tax and super and then do another supplementary pay slip to show the correct values/items that should have been paid.
  • However, before you can do that you will need to set up an allowance which we will call Pay Adjustment but you can name it anything that suits.
 
Follow the below instructions to reverse overpayment and create correct pay slip/payment.
  1. Go to Setup > Allowances.
  2. Do you already have an allowance called Pay Adjustment? If not, Add to launch the Allowance Wizard.
  3. Click Next to the Allowance Type page and make sure Standard Allowance option is selected.
  4. Click Next to the Allowance Details page, enter Pay Adjustment for the Description, ensure Type is set to Addition, Frequency is Each Pay, Amount leave it blank, tick both Taxed and Include in Super Calculations.
  5. Click Next until the end of the Wizard and click Finish.
  6. Click Close to close out of the Allowances screen.
  7. Ensure the correct PPE Date is selected at the top right of the main screen otherwise click on it and set it to the appropriate Pay Period Ending date.
  8. Go to File > Maintenance > Supplementary Pay Slip and click ‘Yes’ on the Warning to launch the Wages Wizard.
  9. Select the appropriate employee from the drop-down list, ensure there are no hours on the Timesheet and click Next to the Adjustments page.
  10. Click on Allowances on the left and Add to bring up Add Employee Allowance.
  11. Select Pay Adjustment from the Description drop-down list.
  12. Enter the gross you paid for that pay period as a negative in Amount Payable.
    For example -1500.00.
  13. Click OK and if you get a message, click ‘No’ then click OK again.
  14. Click Tax on the left and enter the tax paid as a negative.
  15. Click Superannuation on the left and super as a negative.
  16. Click Next to the pay slip page and ensure there are no other values on the pay slip except for those entries you made.
  17. Click Save if all looks fine.
  18. Run the Payment Summary for the employee from Reports > Employee and check that the Totals at the bottom are all zeros, as expected, for that Pay Period.
  19. Repeat steps 7 to 18, this time with positive amounts to reflect the correct Gross, Tax, Super and Net that should have been paid to the employee which should also reflect in the Payment Summary report when running it again.
  20. If the employee returned the whole net of the incorrect payment, then an EFT Banking File can be created to transfer the correct Net to the employee’s Bank. In this case, a STP Pay Event will be created with the employee’s new YTDs and this pay event can be reported to the ATO.

    OR
    If the employee returned only the excess, then there will be no EFT banking File created and it might be necessary to do a STP Update.


STP Implications:

The values reported to the ATO were overstated for this employee and will automatically correct when the employee receives his next payment and the STP Pay Event is reported to the ATO.

If the employee is not working for the company any more, it is advisable to do a STP Update to correct the employee’s YTDs on myGov.

To do an STP Update:

  1. Click on the STP button and select STP Update.
  2. Untick All employees and select this employee only > OK.
  3. Click on the Report TO ATO button in the top right hand side of the screen.
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