This help guide will detail the different methods you can use to process a missed or incorrect payment in Tanda, such as creating a pay run or processing back payments. Please note that this guide is only relevant for Tanda Payroll subscribers.

Payments to employees—including back pay and other missed or incorrect payments—can be processed via either a normal in-cycle pay run or an out-of-cycle pay run. See the respective linked help guides for details on creating these.

Please note that if an employee receives multiple payslips in a single pay period (e.g. via an out-of-cycle pay run), their earnings from all payslips will be included when determining the tax calculations on other payslips from that pay period. In other words, tax calculations consider all payments within the current pay period when determining tax payments.

This also impacts Schedule 5 payments (back pay, lump sum, etc.). Accordingly, when an employer splits a Schedule 5 payment into its own payslip, the tax calculation is no longer manual. It will instead use earnings from the other payslip(s) in that pay period to correctly calculate the tax owed.

Back payments are taxed on the Schedule 5 Tax Table. See the linked ATO resource for more details on Schedule 5 Tax requirements.

When navigating to an employee's payslip, you may see the following warning:

Ensure that you have read this thoroughly, added the appropriate information in the text box, and clicked UPDATE to save your changes.

If your payment needs to be processed as a lump sum payment, ensure this has been configured in your Lump Sum Types by navigating to Payroll > Payroll Settings > Lump Sum Types > + NEW.

To add a back payment as a lump sum:

1. Find the relevant employee in your pay run and click on their name (Payroll > Pay Runs > Click on the Relevant Pay Period).

2. Click +ADD on the Lump Sum Payments section.

3. Select the relevant Lump Sum Type that you've configured in your settings.

4. Complete all other relevant fields, including Department and Amount.

If this payment needs to be processed as an earnings rate, ensure this has been configured in your Earnings Rate Settings (via Payroll > Payroll Settings > Earnings Rates).

To add a back payment as an earnings rate:

1. Find the relevant employee in your pay run and click on their name (Payroll > Pay Runs > Click on the Relevant Pay Period).

2. Click + ADD next to the Back Payments section.

3. Select the relevant Earnings Rate that you've configured in your settings

4. Complete all other relevant fields, including Department, Rate, and Units.

Reversing a normal gross wages payment will be taxed using the normal earnings tax table. See this ATO resource for more details.

If your accountant has advised you to follow this method, add a negative line item for the amount that was incorrectly paid, along with a positive line item for the correct amount.

For example, this employee was incorrectly paid at a rate of $25 for 10 hours. They should have been paid at a rate of $27.50 for 10 hours. Reversing this payment would look like this:

Leave accruals will automatically calculate when back payment lines are added to a payslip in Tanda Payroll. This makes backpaying employees easier, removing an extra calculation step.

For example, say an employee missed a pay rate update from $20 to $25 for 8 hours during the last pay period. The old way to correct this was to enter 8 hours at $5 on the payslip, which wouldn't affect leave accruals.

However, following a recent update, the new method is to enter -8 hours at $20 and 8 hours at $25, which calculates the correct total plus super, but negates the leave accrual change.

For instance:

Alternatively, if desired, you can still enter it the old way and manually adjust leave accruals.