I was overpaid PPL by my employer to the tune of $2,500. I alerted them and Centrelink the moment I noticed (most of it was paid in one huge amount months after I returned to work so the mistake was apparent). Now my employer wants me to pay back the gross amount despite around $1,300 going in tax due to being paid multiple payments at once on top of my regular wage.
According to Centrelink and the ATO I only need to repay the net amount and my employer can claim the PAYG back through the W1 and W2 labels. My employer claims they can't do this.
Has anyone been in a similar situation? I've contacted my union, the ATO and Centrelink and I've written a formal letter to the payroll officer stating that I will pay back the net amount (I have it set aside ready) and they must contact the ATO about the PAYG tax. Should I request a individual ruling from the ATO? Contact the taxation ombudsman? Any advice would be appreciated.
I cannot afford to pay my employer $1,300 even if I do get it back next tax time. That's nearly a year away and as a single income family we're not rolling in cash. Even spreading the payments out would cause us financial hardship.
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04-11-2014 06:31 #1
PPL overpayment - employer wants gross amount back
04-11-2014 06:43 #2Senior Member
- Join Date
- Jul 2010
So you only actually received the net amount in your bank account? If so then you only need to pay that back. It's not your fault that the company overpaid you (and the ATO) so you're not responsible for giving them that money back. If they keep pushing then direct them to the ATO - they can't take it from you. I've been overpaid my wage and I only had to repay the amount I received.
04-11-2014 07:01 #3
Thanks, Cairnsmummy. Yes I only received the net amount, around $1,250. They withheld about $1,250 for PAYG tax. Now they want me to pay back $2,500.
The thing I'm worried about is that our company's HR manual states that if a payment agreement isn't worked out within 14 days the debt is sent to finance and then to a debt collector. I can see them dragging their feet on this then claiming there's nothing they can do once it's forwarded to finance.
04-11-2014 07:06 #4
My employer over paid some of my government ppl as well. To pay it back they just deducted it out of my pay over 2 -3 months and I only 'paid back' the net amount. I never saw the amount that was taken out in tax, so I didn't have to pay it back. My employer paid the gross amount back to Centrelink and claimed the tax they paid back from the ATO.
How big is the company you work for? Perhaps the payroll people aren't use to this type of thing. I would tell them to call the ATO and/or Centrelink to sort it out. If you still have no luck I would take it further.
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04-11-2014 07:13 #5Senior Member
- Join Date
- Jun 2008
The employer pays the tax component to the tax office and its up to the employer to get it back from them. these types of adjustments are very common. You do not have to pay back the gross and bigger employers would offer a payment plan - it is their mistake, not yours.
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04-11-2014 07:23 #6Senior Member
- Join Date
- Mar 2011
I got over paid ppl. They just kept paying me when it was finished 😏. I just had to pay back the taxed amount no idea what they did about the tax they had paid on it! How stressful for you tho! Hopefully it works out! Maybe you could have a look on the ato website it might have Info which you can pass onto your employer
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04-11-2014 08:26 #7
04-11-2014 08:29 #8
Wow... I'm so glad that my employer is an accountant. You won't have to pay back the money you were taxed but I hope your employer gets their head around it and doesn't give you a hard time about it. xx
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04-11-2014 08:30 #9
I'm ticked off because I would have been financially better off staying at home for the full PPL period. I went back early because it fit with my employer's schedule better and because (up until now) I really love my job. I reported my return to work date to Centrelink ahead of time and to my employer. Just goes to show no good deed goes unpunished.
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