I am one of the thousands of people Woolworths has underpaid over the past decade, and I am now waiting for them to pay it back. The first payment will supposedly be made before Christmas. I do not know at this stage how much I will get, but it could be quite a bit.
My question is: what can I do so that I do not pay a HUGE amount of it in tax?
I have moved on from the job and just do not want the Government taking everything. Could I get Woolworths to pay the tax perhaps?
I highly doubt that Woolies is going to pay your tax.
However, I spoke to the ATO this week about it. They said you’ll be entitled to a tax offset to ensure you don’t pay more tax than you would have if you’d been paid correctly at the time.
And how is that worked out?
All you need to do is include the lump sum payment (including any amounts of tax withheld from them) in your tax return and the ATO will calculate the amount of any offset.
And what about your super contributions?
Woolies will also have to pay you additional super, which may cause you to go over your contributions cap. If that happens, the ATO will either disregard the excess or allocate it to another year.
Basically, the ATO understands you’ve been sold some broken eggs, and they’ll try and unyolk them for you.