Massive salary overpayment by employer -- how to get out of it

Samrazakir

I have been overpaid by employer error when I reduced by hours from full time to part time (100% to 10%), they still continued to pay at full time rate although they were informed about it. The worse is my employment is coming to an end. Now, I am confused how the salary overpayment repayment works in cases where you don't enough salary coming to balance the overpayments done in the past. Few months of salary overpayment are in the current tax year and some months are in the last tax year. Also, I assume I should only be asked to pay the net salary difference to be paid back (not the gross salary difference). Please guide me what should be the best course of action on this. Thanx

sharpe106

You should only pay back the net, even if you leave you still owe them the money. You knew they had been overpaying you and as you said told them. Why did you not put the money to one side? How long did this go on for?

BabyStepper

This happened to me. It was just a one off, and despite being told about it my employer gave me no information about exactly how much I was to pay back (because of tax, NI, etc) for some time. They got there in the end though and fortunately I had the cash put to one side, a rough estimate but it covered the amount.

They will ask you for it back, and you'll need to pay it.  

mcpitman

You can't "get out of it", pay it back.

Samrazakir

 BabyStepper said:

This happened to me. It was just a one off, and despite being told about it my employer gave me no information about exactly how much I was to pay back (because of tax, NI, etc) for some time. They got there in the end though and fortunately I had the cash put to one side, a rough estimate but it covered the amount.

They will ask you for it back, and you'll need to pay it.  

BabyStepper Did you pay back only the amount that was overpaid not including NI and Tax? or it was more complicated repayment? Thanks

kimwp

You won't need to pay back any NI/tax etc. You will only need to pay back the difference between the amount that got paid into your bank account and the amount that should have been paid into your bank account.

BabyStepper

I'm not sure what you're asking. As an employee, your employer pays all tax and NI on your behalf. This is not cash that's given to you, so you won't have to pay it back. i.e. they won't ask for any more to be repaid than you were actually given.

Because the wage you were due is smaller than the amount given to you, the tax and NI will be less too, but that's for them to work out (and sort out with HMRC). You don't need to worry about it. If, for example, you were paid for a month but only worked for a week, then just put 75% aside (or whatever) for repayment. You will likely need to repay slightly less, but you'll be covered. 

Hope you get it sorted. I remember investigating at the time and learning that they can chase this up with you for ages so worth just paying it back as soon as you have the correct figure from them.  

 

Samrazakir

Thank you, it is fine for me as long as I only need to return the difference in net payments. I was confused after reading online that some employers ask for gross salary to be repaid back and then tax and ni refund is done to the employee very late at end of the year. I am not sure whether employer can ask this?

sourcrates

Samrazakir said:

Thank you, it is fine for me as long as I only need to return the difference in net payments. I was confused after reading online that some employers ask for gross salary to be repaid back and then tax and ni refund is done to the employee very late at end of the year. I am not sure whether employer can ask this?

If you have any issues with Tax/NI, you can now log on to your own personal tax account with HMRC.

You create your account using Government gateway, once registered, you can manage your -

Tax

National Insurance

Tax credits (if applicable)

Benefits (if applicable)

State pension

Married Tax allowence (if applicable)

So requesting a tax rebate is now easier than ever, it can all be done online.

Samrazakir

Thanks, actually I have made HMRC account online, will the employer amend the HMRC details of overpayments to normal lower salary after the overpayments have been paid back or it will do this before repayments and ask for the overpayments separately?

sharpe106

They can ask for the full amount back, but all you have to pay back is after tax, national insurance. That is their problem to get that back.