Overpaid

liberty6

Hi

My employer has said that I have been overpaid for the past 3 years by over £10,000.
I pay 40% tax and obviously NI so I haven't gained by the amount they have stated as part of it was paid out to HMRC.
So if the gross amount is £10,000 would i be expected to pay that back or would it be the net amount after tax and NI.
I was unaware of the overpayment I realise they can claim it back.
Thanks in advance

TELLIT01

Ask them for a full breakdown of the amount of overpayment, including the tax and NI elements, plus the reason for the overpayment before agreeing to anything. You should certainly only be repaying the net amount, and I don't think the NI overpayment can be reclaimed by the employer anyway.

liberty6

They have come back with a slightly lower figure just shy of £7000 but with no explanation on how this figure was calculated. It seems like they have only taken off 20% but I pay 40% tax as i'm in the higher bracket (only just without the overpayment ).
the reason for the mistake was due to changing shifts and the company not updating there records my wages dropped and assumed that the paperwork had been done.
Should 40% be deducted ? and would the NI rate be 12% ?
Thanks

Xbigman

Don't agree to anything until you see a proper breakdown of how they calculated the gross amount.

They should take the money back through your wages over several months so the payroll software will work it all out automatically and you'll only lose the net amount. The only way you should agree to a direct payment is if they offer a discount.



Darren

getmore4less

I all the overpayments were at 40% tax depending on other salary components the NI could have been at 2%.

One solution is to offer to pay it back gross from salary using any 40% taxed income you have.

As lump sums are often a problem for overpayments that have gone on a long time a good rule of thumb is the payback period is similar to the overpayment period.

how long would it take using that component of salary?


There is the caveat that where the overpayment should have been obvious to the employee(as yours should have been) and the employee failed to notify the employer they could expect the payment more promptly.

get a proper breakdown, you should be able to do that yourself from your payslips anyway.

ohreally

What about pension contributions?

Andrew_Ryan_89

I hate when companies do this, especially large ones who can afford to write it off. I was overpaid due to system error and ended up having £200+ taken from my account every month for just over a year. Such an inconvenience.

Way back when there was a time I was underpaid for almost two years. I was leaving (as per my rota) at the same time everyday but the system had me working 45 minutes less a day than what I was actually doing. For 2 years that added up to a significant amount but it was a complete ball ache getting that money back

gettingtheresometime

liberty6 wrote: »

Hi

My employer has said that I have been overpaid for the past 3 years by over £10,000.
I pay 40% tax and obviously NI so I haven't gained by the amount they have stated as part of it was paid out to HMRC.
So if the gross amount is £10,000 would i be expected to pay that back or would it be the net amount after tax and NI.
I was unaware of the overpayment I realise they can claim it back.
Thanks in advance

Do they say how the overpayment came about?

Roughly this is nearly £3,500 per year or £300 per month so it's not a small sum.

Is there anyway that you realistically could have been expected to know this overpayment (I presume you got payslips)

liberty6

Yea got pay slips but they are a complete nightmare when I changed shift my take home pay dropped so just assumed (stupid now) that it had changed. The payroll department struggle to work out the wages at the best of times and can come up with 3 different answers when trying to work out queries.
I have requested workings out but am still waiting for that.
Not sure how the pension side of it works as I pay a percentage and they pay a percentage.
I have made an offer of around £100 per month to start paying back the money (not signed or agreed anything official until I see the written proof) but will take many years to pay off.

Undervalued

liberty6 wrote: »

Yea got pay slips but they are a complete nightmare when I changed shift my take home pay dropped so just assumed (stupid now) that it had changed. The payroll department struggle to work out the wages at the best of times and can come up with 3 different answers when trying to work out queries.
I have requested workings out but am still waiting for that.
Not sure how the pension side of it works as I pay a percentage and they pay a percentage.
I have made an offer of around £100 per month to start paying back the money (not signed or agreed anything official until I see the written proof) but will take many years to pay off.

Obviously you are fully entitled to a detailed breakdown of their calculations and to challenge them if you do not agree.

However, once the correct figure is established, keep in mind that they do not have to accept your proposed repayment terms. That is a matter for negotiation and you are relying on their goodwill.

TELLIT01

liberty6 wrote: »

Yea got pay slips but they are a complete nightmare when I changed shift my take home pay dropped so just assumed (stupid now) that it had changed. The payroll department struggle to work out the wages at the best of times and can come up with 3 different answers when trying to work out queries.

As there was a reduction in your take home pay when the shifts changed it doesn't seem unreasonable that you assumed the calculation had been correctly made.
Should it really be up to the employee to calculate the change and advise the payroll department unless there is a glaring error.
I know when I was doing shifts and overtime I would check the payslip to ensure the hours were correct but would then assume the calculations were right.