Employer overpaid - tax, NI, student loan?

jacroberts

Hi, I wonder if anyone can help please?

I received an email from my employer today stating that there had been a mix up in payroll and I have been overpaid (we received a 1% bonus for working hard during the recession, a kind of thanks as there is a pay freeze).

So the additional amount was waaaaaaaay over the supposed 1%, which means quite a lot more NI, tax and student loan was taken.

I have been given the option of writing the company a personal cheque by 1 December or having it deducted from my December salary.

So my question is, how should this effect the deductions? I'm just really confused. Will my employer ask for it back? Will they make me claim for overpaid tax?

Any help would be much appreciated!

Jac

Tixy

Were you payslips also wrong (showing too high an amount) or was more paid into your bank than shown on the payslip?

If your payslips were also wrong then on your next payslip they will show the correction and this will self correct your deductions of tax & student loan.

Depending on your salary level and the amount of overpayment you may need to double check you haven't ended up worse off for NI from this by the end of the year - if so the firm won't be able to get it back from HMRC but your firm should compensate you if you have lost out as it was their error.

(to do this you'd need to compare each month what salary you were paid & how much NI you did pay and compare that with how much you were paid and what NI you were charged - and tot up to see if you are worse off - if you end up better off then that does not matter to HMRC or your employer)

Tixy

To check your NI this is the info you need:

-For monthly pay you will pay no employees NI on the first £477 you earn, for everything between £477 and £3657 you pay 11% employees NI. Anything over £3657 you pay just 1% in NI.

You would only have missed out if your overpayment took you into a different band to normal or if in December you drop into a lower band than normal due to the lower salary.

jacroberts

Thanks for the quick reply Tixy. Much appreciated.

I will be within the £477 to £3657 band both this month (with overpayment) and Dec (with possible underpayment).

The overpayment is detailed on my pay slip, it won't actually go into my bank until tomorrow.

So I guess if I plump for the December deduction option then all NI, tax and student loan would even themselves out over the 2 months?

nekosuki

Hi jacroberts, I agree with Tixy - you should ask for it to be deducted from your next payroll as this should mean your deductions are sorted out automatically.

In the meantime stick the extra in as high a savings account as you can get your hands on for 1 month

jacroberts

I wish they'd have overpaid me by that much that it would make that big an amount of interest!! :beer: