Work out what the employee should have been paid

The easiest way to work this out is to review a sample pay for the employee.

1. Start a new pay run for the employee and .
2. Click the zoom arrow ( _{Image Added} ) to review their pay details. The values shown will be based on the employee's updated pay rate on the Pay Employee window.
3. Take note of the gross pay (Base Salary or Base Hourly) and PAYG Withholding values. Calculate the gross pay and PAYG Withholding values for the back pay period. For example, if the employee's pay is for 1 week and the back pay period is 4 weeks, multiply the values by 4Here's our example for a weekly pay which we've also multiplied by 4 to get values for a 4 week pay:
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4. If necessary, multiply the values based on the number of weeks of back pay that is due.
5. Cancel the pay run without saving.

When you process the employee's pay,

Write the paycheque for the employee pay. This pay would firstly include their wage for that pay period which would be calculated using the new rate of pay. Take a note of the PAYG Income Tax amount that the payroll module has automatically calculated and write it on a separate sheet of paper. Add the result from Step 6 to the figure written down in Step 8. This will give us the figure that needs to be entered for PAYG Income Tax on the paycheque. Do not manually change anything on the paycheque in this step. Add the figure calculated in Step 3 to the wage for that pay period, this will automatically adjust the PAYG Tax Amount to an INCORRECT figure. Now change the PAYG Tax to the figure calculated in Step 9. This will result in the paycheque having the correct PAYG Income Tax and the correct amount of back pay included in the employee's normal pay period's wages.

Pay the back pay

You can now include the back pay in the employee's next pay. 

1. Start a new pay run for the employee.
2. Click the zoom arrow ( _{Image Added} ) to review their pay details on the Pay Employee window.
3. Determine the PAYG Withholding payable:
1. Take note of the PAYG Withholding value shown in the employee's pay.
2. Add the back pay tax amount calculated above to work out the total tax payable.
4. Click Add Payroll Category.
5. Select the Back Pay category and click OK.
6. Enter the gross back pay value against the Back Pay category.
7. Change the PAYG Withholding value to the figure you calculated at step 3. Here's our example with $100 entered against the Back Pay wage category and the PAYG Withholding value adjusted.
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8. Record the pay.