Salary Over payment / Paying Back

NarkT_Ov

Work havec**ked up my pay this month. Got paid £3k extra I wasn’t entitled to ascompensation due to change in company pension scheme. So the HR dept are goingto do some calculations to see what needs to be paid back. They need to sortout NI & Tax payments as they are both higher than they would be. I agreewith this but how do I check they are getting the correct amount back and notdoing me over?

I will be able to pay back by cheque or installments but leave in June. Should I pay back allin one go or will there be a tax advantage for me in paying back in instalmentseach month from my wages?

My NI is lower than normal as we are contracted out of serps so we have a higher finalpension.

So here’s what I was expecting.
Flat month gross £3204.35
Less NICwise£168.57
Before tax then £3035.78
Net Pay £2506.44

This month £6373.00
Less NICwise £168.57
Before Tax& NI £6204.43
Net pay £4180.17

hcb42

Personally I would pay it straight back (subject to correct NI/Tax calcs), and don't understand the need for installments for an error.

I would definitely be paying it all back before the end of the tax year however.

Poppie68

NarkT_Ov wrote: »

Work havec**ked up my pay this month. Got paid £3k extra I wasn’t entitled to ascompensation due to change in company pension scheme. So the HR dept are goingto do some calculations to see what needs to be paid back. They need to sortout NI & Tax payments as they are both higher than they would be. I agreewith this but how do I check they are getting the correct amount back and notdoing me over?

I will be ableto pay back by cheque or installments but leave in June. Should I pay back allin one go or will there be a tax advantage for me in paying back in instalmentseach month from my wages?

My NI is lower than normal as we are contracted out of serps so we have a higher finalpension.

So here’s what I was expecting.
Flat month gross £3204.35
Less NICwise£168.57
Before tax then £3035.78
Net Pay £2506.44

This month £6373.00
Less NICwise £168.57
Before Tax& NI £6204.43
Net pay £4180.17

It's not your choice to make, they could insist you pay it back in one payment...
Most companies though would agree to instalments if paying it all back at once would cause hardship to the employee..
You have the money and it belongs to them so pay the easiest and less stressful way is to return it now...There is nothing to be gained tax wise by making instalments.

NarkT_Ov

hcb42 wrote: »

pay it straight back (subject to correct NI/Tax calcs),

That's the bit I need help with to make sure I'm not out of pocket, hence the thread.

hcb42

the payroll system should cope with this - as long as you dont receive less than you would have normally done,then that's fine.

Poppie68

Your employer will adjust your tax when working out the over payment... You can easily see if this is correct as you already know how much you should of been paid and how much tax/NI you should pay...they should issue you with a an amended pay slip if not request one.

NarkT_Ov

Well they've come back with a figure. Just expect me to pay it. No mention that I may want to check it first. I'll make them wait.

lisa110rry

For reasons I won't elaborate on, the firm I work for once paid the payroll twice for the same month. Those employees who bank at the same bank that the firm uses quickly had the overpayment taken back, but those like me who bank elsewhere received the double payment. We just issued a letter saying that it would be considered an advance on next month's wages. I thought that was quite nice at the time, but we are a relatively small and cash rich firm...

Undervalued

NarkT_Ov wrote: »

Well they've come back with a figure. Just expect me to pay it. No mention that I may want to check it first. I'll make them wait.

Well, I don't suppose they write to you each month and say "This is what we think you have earned but would you like to check first"!

They pay then, if an error is discovered either way, it is corrected. That is what has happened here.

Yes, by all means check the sums and raise any legitimate query but overpayments should be promptly corrected.

If an overpayment has built up from small amounts over many months then there is an argument for repaying in instalments but really, checking your pay is as much your responsibility as theirs.

Doshwaster

lisa110rry wrote: »

For reasons I won't elaborate on, the firm I work for once paid the payroll twice for the same month. Those employees who bank at the same bank that the firm uses quickly had the overpayment taken back, but those like me who bank elsewhere received the double payment. We just issued a letter saying that it would be considered an advance on next month's wages. I thought that was quite nice at the time, but we are a relatively small and cash rich firm...

That happened to use once (I think the head of payroll was fired over it) but the agreement was that everyone got to keep the money and there just wouldn't be a pay day the following month.

redpete

I had something similar happen - a reduction of £1000+ was processed as an addition instead so the following month I had the overpayment taken out, the reduction for the first month as it should have been and the reduction as expected for the second month. The net result was that I was better off by a few £10s due to the extra NI in month 1 being taken out at 2% (I think) but the large reduction in pay in the second month reduced the NI at the 12% rate.

I have a spreadsheet that allows me to check all deductions are correct but there are several online resources that allow you to do the same.