Overpayment- employer wants gross pay back

CarlHerts

Hi,

I recently found out that I'd been overpaid by £1500 (gross). I immediately notified my employer. Their response is to say that they will take the £1500 out of my next payslip.

However, the net overpayment was more like £1050. The overpayment means that I paid much more into my student loan repayment and pension contributions than usual. I think it is up to me to decide whether or not I want to make additional contributions; I shouldn't have this forced on me by my employer due to their administrative errors.

I realise that if they take the gross amount out of next months' paycheck, I will pay less tax and in theory everything should balance out. However, I will still effectively be left short of disposable income due to the extra, unwanted loan and pension contributions that I didn't want to make. Also, I am very annoyed by their approach to the problem (no attempt to negotiate a payback plan or even check that no financial hardship will be incurred)

How likely am I to succeed in asking to pay back only the net if this were to eventually go to conciliation or a tribunal?

boliston

Surely they should correct their calculations first and only then ask you to refund the NET overpayment.

theoretica

Won't you also make lower loan and pension contributions in the month they take this back so that balances out (or very nearly) too?

Kynthia

Surely you'll then have less tax, pension and loan deductions so over the months effected you'll receive the correct net pay? Ask on the cutting tax board once the amount is deducted with the figures to hand and they'll check for you.

CarlHerts

Hi,

I'm not entirely sure that my student loan contribution will be lower; but even assuming it is, the point is that- even if I don't end up out of pocket- they say they will take the whole £1500 in next month's paycheck.

Doesn't that seem excessive? That's more than 75% of my total net pay- it will leave me with about £400 net income for the last weeks of December (we get paid early, before Christmas) and all of January.

I'm annoyed at the principle as much as anything- surely when talking about a large sum of money which is more than half my monthly salary, at least suggest paying it back in installments? It's not really reasonable to expect me to live off a huge overpayment one month and a huge underpayment the next month. At the very least I'm owed an explanation, someone to go through the figures with me and explain how I'm apparently not going to be worse off, rather than a casual one-line email to payroll (which I wasn't even cc:d on or consulted about) saying "please take £1500 off his paycheck next month."

Or am I being oversensitive here?

lee111s

So are you saying you've spent this overpayment?


If not, then simply keep it to one side and move it into your current account on the same day you get paid and you'll be no worse off.

FBaby

Why would you have spent the money that you knew you were not supposed to have? Surely that is you fault as the principle is that you should have kept the money to last until the end of the following month?

TBagpuss

So, if the net overpayment was £1000 presumably you have that set aside, so can repay that to them, and the deduction from your next paycheck would be around £500. They should be able to calculate the correct tax and NI also.

I think it would be reasonable for you to speak to them and ask for that they will ensure that the ta and NI are corrected n the same payslip, to minimise the disruption caused by the overpayment of pension and student loan (which they probably can't claw back)

If you are going to struggle then you could ask that they spread the repayment over 2 months.

If the overpayent was over several months then you could ask that it be repaid over the same period - your post reads as if you were given a single overpayment, but if it was longer term then it is not unreasonable to speak to them.

But it is legal - https://www.gov.uk/understanding-your-pay/deductions-from-your-pay

somethingcorporate

You overpayment from last month will cover the underpayment from this - what's the problem here?

In terms of increasing contribution to your pension and paying down your loan are both good things. They may result in a few less quid in your pocket but still building your wealth and reducing your debt.

t0rt0ise

When similar happened to me the pension overpayment was returned.

Xbigman

To answer the OPs query. If you are asked to hand money back to your employer they will ask you for the NET figure.
If they take money back through your wages they will take the GROSS figure but before deductions are made.
You will actually pay back the same amount of money either way.



Darren