Maternity Pay Overpayment

TechGem

Hi,
In April 2020 my employer overpaid my maternity pay by £402.52 gross and now they want me to pay this back which is fine as I can see that I was overpaid but they are saying that the gross figure has to be deducted even though I have paid tax and NI on that gross amount - is this correct?
TIA

Comms69

The tax will sort itself out in April. The NI generally wont - it's a right hassle to reclaim. 

chrisbur

TechGem said:

they are saying that the gross figure has to be deducted 

What are they planning to deduct this from?

TechGem

I went back to work at the start of October so they are deducting it from this month's pay.

nick74

If they deduct the gross amount from this month's gross pay then the PAYE and NI will correct themselves this month.

chrisbur

TechGem said:

I went back to work at the start of October so they are deducting it from this month's pay.

In most cases provided that they deduct it from the gross pay and not the net pay this will be fine.  Tax will be correct as that is based on your total taxable earnings and that figure will have increased when you were paid this and decreased by the same amount when  it is repaid.  National insurance can be a bit more complicated if the payment and the deduction do not both fall in the same band of NI deductions.  For example if the NI deduction was all at 12% originally and the repayment reduced your earnings to below the Primary Threshold then you would have paid some NI that was not refunded.  In this case your employer would need to do a manual adjustment to correct for this.
So provided that your payroll dept. know what they are doing there will be no problem, but not all do know what they are doing so firstly check that the deduction is from gross then tax will be fine, NI is a bit more complicated.  Broadly speaking as long as the deduction leaves you with a gross of at least £792 and your starting gross is not over £4167 you will be fine..