Correcting earnings payment data reported to the Incomes Register

A reporting-related error arises when the income was correctly paid but was incorrectly reported to the Incomes Register. This could be the case when there is a typing error in a report concerning an income earner, for example, or the income paid has been reported under an incorrect income type.

The error could also be due to incorrectly entered mandatory data or failure to report mandatory data. If a fringe benefit available to the income earner has not been reported, for example, this must be corrected. A correction must also be made if the insurance information of an income type or details on an income earner who is a non-resident taxpayer has been reported incorrectly or not reported at all.

If incorrect data was submitted on the original report or information was missing, the report must be corrected using a replacement report. The number of corrections is not limited, i.e. data can be corrected several times.

There may also be a need to correct a report for some reason other than an error. The work circumstances or the income earner’s status as a taxpayer may change, in which case the original report needs to be retroactively corrected using the replacement report. For example, if the duration of a foreign income earner’s employment is extended so that a non-resident taxpayer becomes a resident taxpayer, this information must be corrected.

Payment errors are situations where the report is correct, but the amount of income paid was too small or too large. Payment errors can be corrected in different ways, and a replacement report does not always need to be submitted.

If the income earner has been paid too little in wages – for example, payment of overtime compensation was forgotten – the original report is not corrected. In such a case, a new report is submitted to the Incomes Register about the forgotten payment no later than on the fifth calendar day after the payment date.

Correcting withholding tax

The amount of withholding tax may also have been too high or too low. The payer may have made a calculation error, for example, or used an incorrect withholding rate. Under certain conditions, the payer can correct the amount of tax withheld. For examples on correcting withholding tax, please refer to the instructions Correcting data in the Incomes Register (section 2.3.).

Negative figures can only be reported in exceptional situations

Income types cannot be corrected in the Incomes Register using negative figures, i.e. figures with minus signs. Incorrectly reported or incorrectly paid income is corrected by submitting a replacement report that states the correct amount of income or its changed nature, e.g. if the income paid is changed to unjust enrichment.

In some exceptional situations, certain income types, such as withholding tax and the employee's social insurance contributions, may be negative figures. Such a situation could also arise if, for example, the employment relationship has ended and the tax withheld from the income paid to the income earner has been too high and no further payments are made to the income earner in the same calendar year.

Unjust enrichment

In some situations, the income earner is not entitled to a payment made to them and reported in the Incomes Register. An unjust enrichment occurs when, for example, a payment has been made on incorrect grounds, to the wrong person, or in an incorrect amount.

Unjust enrichment must be reported without undue delay and no later than within one month after the unjust enrichment was noticed.

An unjust enrichment must always be reported when the payer separately recovers the excess amount paid from the income earner. In addition, unjust enrichment must always be reported when the overpayment cannot be fully corrected in the next payment of wages.

• If the overpayment is corrected in the following payments of wages as advance pay deducted from gross wages, only the gross amount actually paid to the income earner, with the advance payment deducted, needs to be reported to the Incomes Register.

It is important to separate an unjust enrichment from other payments in order to ensure that the correct income is used as the basis of benefits granted to the income earner, for example.

There are two ways to report an unjust enrichment. The method of reporting depends on whether the income has already been reported to the Incomes Register as other income or if the unjust enrichment paid was identified before reporting the data.

For examples on reporting an unjust enrichment, please refer to the instructions Correcting data in the Incomes Register (section 3).

Recovery of a payment

When an income earner pays a mistakenly paid unjust enrichment or other payment back to the payer, the payer must report the repayment to the Incomes Register. The recovered amount is not corrected on the original report; instead, the recovered amount is reported on a new report during the pay period in which the income is recovered.

The income paid can be recovered as either a gross or net amount.

• In gross recovery, the payment is recovered in the same amount as it was paid to the income earner, including withholding tax.
• In net recovery, the payment is recovered from the income earner as a net amount, i.e. the payer deducts the tax withheld from the amount. The payer deducts the withheld tax from other taxes paid to the Tax Administration.

For examples on the recovery of a payment and reporting it, please refer to the instructions in Correcting data in the Incomes Register (section 4).