Potential overpayment of salary sacrifice

fcjf

I have been paying 56% of my salary into my workplace pension via sal sac however due to recently receiving some inheritance I wanted to increase this to the max possible. I asked my work HR dept if they could advise what the max % of my monthly salary I could sacrifice and they initially came back with up to 100%. I queried this as from these boards and other research I understood that they couldn’t pay me less than NMW. They came back a few days later and said that they had it wrong and after consulting with payroll I couldn’t be paid less than the Lower Earnings Limit and that my min monthly gross would be £1,191.01. We had passed the payroll cut off for January so didn’t pursue it further. I was paid on Wednesday and my payslip shows gross monthly salary of £1,191.01, with a tax refund of £59.20 and NI Payment of £11.44.

My contracted salary is £90,500 based on 37.5 hours per week.

Has my employer got this wrong? After sal sac I’m heading for an end of tax year gross salary of around £40,000 so could the NMW be based on an annual calculation or do I need to be paid the NMW for each monthly pay period. If my employer has got this wrong, what will they need to do to rectify it and will I need to pay the underpaid NI? I’m not concerned about the tax as I will be paying the full year end gross salary amount into a SIPP (I have plenty carry forward).

Should I take this up with them again or will HMRC contact my employer?

jimjames

I believe it will be NMW per pay period. Otherwise you'd be working for January say and not be paid at all if you'd earned more earlier in the year.

QrizB

Yes, NMW is calculated per pay period.

Edit: are you thinking that your employer has mis-calculated your monthly NMW?

Current over-21 NMW is £11.44 an hour, so for someone on a 37.5 hours per week contract it works out as £429 a week. That's quite a lot more than £1191.01 a month.

fcjf

QrizB said:

Yes, NMW is calculated per pay period.what makes you think you've underpaid NI?

If my monthly salary should have been say £1900 instead of £1191 then although I have paid the correct amount for the actual salary paid I haven't paid enough for the salary I should have been paid. How will this get rectified, will my employer have to make a balance payment to make my monthly salary up to NMW and then deduct tax and NI on that?   

fcjf

QrizB said:

Edit: are you thinking that your employer has mis-calculated your monthly NMW?

Yes, I'm sure they have. As stated in the original post I was paid £1191 for the month. I am contracted for 37.5 hrs per week so unless I am missing something I haven't been paid NMW.

Dazed_and_C0nfused

They came back a few days later and said that they had it wrong and after consulting with payroll I couldn’t be paid less than the Lower Earnings Limit and that my min monthly gross would be £1,191.01

You could ask them "Lower Earnings Limit"'they are referring to as it's not the NI one or the Auto enrolment limit sometimes called that.

Your minimum wage is likely to be at least £1,850/month.

QrizB

fcjf said:

QrizB said:

Edit: are you thinking that your employer has mis-calculated your monthly NMW?

Yes, I'm sure they have. As stated in the original post I was paid £1191 for the month. I am contracted for 37.5 hrs per week so unless I am missing something I haven't been paid NMW.

I think you need to take it up with your employer. In principle they're liable for your underpaid salary.