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.
2. Click the zoom arrow ( ) to review their pay details on the Pay Employee window.
3. Take note of the gross pay and PAYG Withholding values.
4. Calculate the gross pay and PAYG Withholding values for the back pay period.
   Example: If the back pay period is 4 weeks and the sample pay is for 1 week, multiply the values by 4.
   
5. Cancel the pay without saving.

The Payroll Activity (Detail) report provides this information.

1. Run the Payroll Activity (Detail) report for the back pay period (Reports > Index to Reports > Payroll > Employees > Activity Detail).
2. Filter the report.
   • Select the employee who is owed back pay.
   • Specify a date range to capture the back pay period.
3. Take note of the employee's Wages and Taxes values.

Once you know what the employee should have been paid and what they were actually paid, the back pay calculation is simple: subtract one from the other.

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 ( ) 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.
8. Record the pay.