Money Moral Dilemma: My employer keeps overpaying me and isn't taking the money back

iainambler

It sounds like you’ve absolutely done the right thing. You’ve raised the error with your employer and you’ve held on to the overpaid amount so it can be paid back. 

Firstly, ensure you’ve kept the receipts -
make sure you have copies of your emails informing them, and theirs saying they will resolve it. That covers your backside if someone gets unreasonable. 

Second, keep a spreadsheet that summarises the amount of overpayment, date and has a cumulative total. 

Third, some who have commented already have wisely mentioned that the overpayment means you’ve also likely overpaid tax and NI. If that changes your tax band that will increase your tax liability.  Whilst it’s for your employer to recalculate your tax when they request repayment, might be worth using a salary calculator (I use listentotaxman.com) to work out what you should have been paid and then comparing the difference in Tax and NI. 

Fourth - check if your pension contributions might be affected too. That may cause you more issues than tax repayment. 

Lastly, if you’re a union member this is exactly the kind of issue they can help with - especially if they !!!!!! up any repayment calculations!

Good luck with it, and good on you for being totally honest!  

RufusLechuga

You've done your bit. The responsibility is now on them to correct it. Just keep a record that you alerted them in the first place. 

It's unbelievable someone would be upset about getting paid too much. If you've covered your own back by making them aware of it, you're safe to just keep the interest and be grateful for a bit of good luck. It seems odd to be chasing it up as though they're underpaying you. 

You could even hope they never ask for it back. That would obviously be the best case scenario. For those of us who have been through times having to get by almost completely broke, it's almost insulting to think about the idea of somebody complaining about being paid overpaid. 

If it is really making you feel uncomfortable, set up a direct debit to pay the interest off to a charity which helps people struggling for food or shelter. 

kimwp

It's completely believable and reasonable to be concerned about being overpaid. This is an additional thing to keep track of and manage, could cause tax and NI issues, could cause the receiver to inadvertently be part of a money laundering or tax evasion scheme and suffer the consequence of that, will cause at a minimum, inconvenience when they are asked to pay it back... 

It's not just extra money they are being given.

iclayt

I would be tempted to raise a formal grievance and send it to payroll, HR and manager especially if you have concerns about NI, tax etc. I would consider speaking to ACAS about any liability on their part, repercussions for you, and any other suggestions they might have. 
But in the meantime you're doing the only thing you can do, which is save the money, so relax about that part. 

ijustlovesavingmoney

You could put the money into Premium Bonds then you don’t have to worry about the interest and you could win 1 Million £.😀

ecnirp98

As you have notified them, I would make a note of who you contacted and when.

I had an issue a few years ago, I was made redundant by a firm after 10 years, I had to handover to the overseas IT company taking over, so had to serve 3 months notice but I got enhanced redundancy on completion of the handover. 

My team of 4 were the first to be made redundant after consultancy, I agreed the 3 months and started preparing handover docs etc, about 2 months into my 3 months noticed I was summoned to a meeting room with the rest of the IT staff (around 60 people) where they were all told they were under consultation for redundancy, I walked out as I was already agreed my redundancy, I told my manager what happened, he wasn't interested as he was beung made redundant anyway!

So, I completed my 3 months redundancy (I got a new job during my notice period and agreed a start date 1 month after my last day)., so I got a £50K redundancy package, took a month off and started my new job.

2 months later I received another £50K payment in my current account from my former employer I left 3 months earlier, I rung the HR/payroll department in London HQ(this is a very big multinational household goods manufacturer) and explained I had been made redundant 3 months ago and just got another redundancy payment, payroll said it was correct and payroll had been instructed to pay me, which they have, so all good for them! I knew this was wrong, so I took the persions name & details, and said to contact me if they discovered an error, but told them formally I was informing them of what I believe is an error and it was for them to check, which they had.

I took the new £50K and bought premium bonds, as I wanted something with instant access that I could access immediately when I paid it back as I knew it was a mistake. 2 months later I got an irate email from a finance directory telling me how I had knowingly accepted an incorrect payment and how they would pursue me legally if I did not return it with interest immediately. I took great pleasure phoning the director and telling her what had happened and who I had contacted in HR/payroll as soon as I got the payment. They then apologised and agree to send me a letter confirming the incorrect payment and an undertaking to cover any tax liability caused bu the extra payment (£100K in redundany in 1 year and a new job affects your tax code!!!).

At the end of the day, I won 4 prices in 2 months with NSI, so made £350 and I paid the money straight back, so If I was you, I would use the excess money to buy the premium bonds and see what you can win, as long as you have informed everyone you can at your employer, as you will continue working there, whereas I was made redundant, so my future with them did not matter.

newkitchenfund

If you have a student loan, this may also be affected. You may be repaying more than you would be if your pay were correct. It's may be very difficult to get this refunded when the overpayments are corrected, especially if the situation continues into a new tax year. 
You're doing the right thing by keeping the overpayments safe in a separate account, but it's clearly worrying you so I'd escalate this if it's not resolved soon. Your peace of mind is more important than a bit of extra interest on money that you know isn't yours. 

ed.tombs

MSE_Sarah said:

This week's MoneySaver who wants advice asks...

My employer's been overpaying me by a large amount every month. I've flagged it with payroll and my managers via email; they thanked me and said they'd take the money back in small amounts each month. But that hasn't happened, they've kept overpaying me. I've been putting the extra money in a high-interest account, and while I've no intention of keeping it, friends and family say it's OK to sit on it and keep earning interest. But it's mounting up and starting to worry me. Do I keep chasing work about it or just wait for them to sort it out? 

Unfortunately the MSE team can't answer Money Moral Dilemma questions as contributions are emailed in or suggested in person. They are intended to be a point of debate and discussed at face value. Remember that behind each dilemma there is a real person so, as the forum rules say, please keep it kind and keep it clean.

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A former colleague of mine got paid exactly double what he usually would expect to get paid one month. Is payslip said that he had worked 75 hours when he'd only worked 37.5  He called payroll and told them and followed up via email and was told in no uncertain terms that it was impossible. 

He kept the money in a separate account for a year and no one ever followed up with him. We, his colleagues, all agreed that he'd done enough to make them aware and we all hoped it would happen to us......it never did. 

gloriouslyhappy

 it's almost insulting to think about the idea of somebody complaining about being paid overpaid. 

This is very shortsighted - at some point, payroll will realise the error and want the excess returned, and there are tax, pension, and NI implications too.

The correct thing to do is hold the excess in a separate account, and continue pointing out the error in writing. Keep every bit of correspondence, and when the finance department eventually wakes up and requests return of the overpayment, make sure it’s deducted through payroll which will balance out pension, tax etc.

Kay_co

I worked very part time at the end of my civil service career and was over paid £3k over a couple of years. I kept alerting them to it because I knew I’d have to pay it back. They did nothing. Approx 2 years after I’d retired I got the letter asking for it to be repaid. I’d done as you’re doing and had kept it to one side. I’d remind them each month and put it out of my head. Yes you’ll have to repay it but what more can you do until they sort it out.