Correcting an Overpayment for a Terminated Employee with STP Finalisation

If you realise that a terminated employee was overpaid in a past pay run and a Single Touch Payroll (STP) finalisation event was submitted, you can't regain the overpaid amount through a pay run. Instead, your company will have to contact the employee about being repaid through a direct payment.

An overpayment like this probably resulted in an overpayment on superannuation as well, which cannot be reduced off future employer super contributions.You can handle both situations in a similar way.

Processing the Repayment

After receiving the money from the employee, use Accounts Receivable to receipt payment and clear the net balance of the clearing account.

Correcting Year-To-Date Values

After recouping the overpaid amount, you can use the adjustment pay to correct the employee's year-to-date values.

  1. Create an adjustment pay for the terminated employee's last pay run. For steps on how to create an adjustment pay, see Adjusting Pays. The employee’s termination details are carried across to positive adjustment pay run.

    Note:
    The employee record is reactivated as part of this process.

  2. Correct the pay records and complete termination again. This deactivates the employee record again.

  3. Submit an STP update event. The finalise event indicator sent to the ATO remains true.