Can my employer take an overpayment out of my next pay?

Not without your written agreement. Section 324 of the Fair Work Act 2009 only permits deductions you have authorised in writing (specifying the amount), or that an award, enterprise agreement, law or court order allows. A past overpayment on its own is none of those — the Fair Work Ombudsman's guidance is that the employer must agree a repayment arrangement with you, with the amount and frequency recorded in writing.

Do I repay the gross or the net amount of an overpayment?

It depends on when the mistake was identified, not when you repay. Identified in the same financial year it was paid: you repay only the net amount that reached your account, and the employer corrects the tax through their payroll (STP) reporting — even if your instalments run into the next year. Identified in a later financial year: the ATO treatment is repaying the gross; the employer issues an amended income statement for the overpaid year and you get the extra tax back by amending that year's tax return.

Do I have to repay an overpayment at all?

A genuine accidental overpayment is a debt the employer can pursue, so refusing outright usually just moves it to a formal debt claim. But you're entitled to verify it really is an overpayment — not pay for hours you worked or your agreed rate at the time — and to a repayment schedule you can afford. If you dispute it, say so in writing before agreeing to anything.

How fast can my employer make me repay?

There's no fixed statutory rate — the plan must be agreed, and the Fair Work Ombudsman says the repayment frequency has to be reasonable. The FWO's own published example is gentle: $2,000 overpaid, repaid at $20 a week. An employer demanding the whole amount from one pay, or instalments that leave you unable to pay rent, is not offering a reasonable arrangement. Counter-offer with what you can actually afford; this calculator generates the schedule.

What if deductions have already started without my agreement?

Unauthorised deductions are themselves an underpayment. Write to your employer asking for the deductions to stop and the withheld amounts to be restored while you negotiate a written plan. If they refuse, the Fair Work Ombudsman deals with unlawful deductions, and the amounts are recoverable.

Overpayment Payback Calculator

Employer overpaid you and wants it back? Check what they can legally deduct under s324, whether you repay gross or net, and build a fair repayment plan.

Last verified: 23 August 2026

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General information and estimates only — not legal, financial or tax advice. Always check your specific award, agreement or contract, or a qualified professional, before you rely on the result.

Overpayment Payback Calculator

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