Correcting earnings payment data reported to the Incomes Register

A reporting error means that income was paid correctly but reported to the Incomes Register incorrectly. Reporting errors include the following situations:

• There is a typing error in a report concerning an income earner.
• Paid income was reported using an incorrect income type.
• Mandatory data was reported incorrectly or not at all. Example:
  • a fringe benefit used by an income earner has not been reported
  • an income type’s insurance information was reported incorrectly or not at all
  • information on a non-resident taxpayer was reported incorrectly or not at all.

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.

The number of corrections that can be made is unlimited.

A payment error means that a report was correct considering the income paid, but the amount of the income paid was too high or too low.

If an income earner has been paid too little in wages – for example, the payment of overtime compensation was forgotten – the original report must not be corrected. In such a case, a new report must be submitted to the Incomes Register regarding the forgotten payment and a subsequent payment no later than on the fifth calendar day after the payment date. If an income earner has been paid too much in wages, the overpayment must be reported as an unjust enrichment.

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.

Any too large an amount of tax withheld must be corrected by reducing tax withheld from subsequent wages paid during the same calendar year.

If no wages are paid to the income earner during the same calendar year, too large an amount of tax withheld can be rectified by returning the excess amount withheld to the income earner. The withheld amount returned to the income earner must be reported to the Incomes Register using a separate earnings payment report, if the extraneous amount withheld has been paid in the recipient’s account. The extraneous amount withheld must be reported to the Incomes Register as a negative amount.

The extraneous amount withheld must be returned to the income earner during the same calendar year. It cannot be adjusted during the following year by reporting a negative amount withheld. If the extraneous amount withheld cannot be returned on time, it can no longer be returned to the income earner. Instead, the full withheld amount will be accredited to the income earner in the payment year’s taxation.

For examples of how to correct withholding tax, see instructions Correcting data in the Incomes Register (Section 2.3).

Negative amounts can only be reported in exceptional situations

Income data cannot be corrected in the Incomes Register using negative amounts, i.e. amounts with minus signs. Incorrectly reported or incorrectly paid income must be 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 an unjust enrichment.

In some exceptional situations, certain income types, such as withholding tax and the employee’s social insurance contributions, can be reported as negative amounts. Such a situation may exist 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 during the same calendar year.

When using negative amounts, it should be remembered that

• negative withholding tax can only be submitted on the earnings payment report if the withholding tax cannot be adjusted by reducing tax withheld from subsequent wages.