Another overpaid at work! Help.

organised

I have been overpaid by my employer. I have asked for a full breakdown etc. My question is they are asking for the payment of over worked hours times hourly rate. Do tax and NI contributions get deducted from this amount or do I have to pay back the calculation of hours times hourly rate. So for example 100 hours time 5.00 per hour is £500. Do I owe them £500?

Thanks,
Confused...:eek:

LilacPixie

No experience of this but i would imagine the hourly rate would have to be net i.e minus around 28% to allow for tax and NI.

Other than that say you will work back the hours so if they paid you 20 hours too much before tax you work back 20 hours KWIM

dori2o

organised wrote: »

I have been overpaid by my employer. I have asked for a full breakdown etc. My question is they are asking for the payment of over worked hours times hourly rate. Do tax and NI contributions get deducted from this amount or do I have to pay back the calculation of hours times hourly rate. So for example 100 hours time 5.00 per hour is £500. Do I owe them £500?

Thanks,
Confused...:eek:

What should happen is that from your gross pay they will deduct 'x' amount (under whatever agreement you have come to with your emoployer), then the amount that is left will be taxed, therefore giving you relief on the amount that you have already paid tax on.

DO NOT allow your employer to take the overpaid amount from your NET pay. This will result in you having paid too much tax on your salary.

This problem of overpaying is not an uncommon thing and is actually explained how it should be resolved in the Employers Handbok that is issued annualy by HMRC.

CarolynH

This is a busy time of year for payroll. They will likely try to get you to pay back gross (i.e. hourly rate times hours), rather than re-run the payroll.
My advice would be to stick to your guns and not do this.

You are paid net (i.e. what is left after tax and NI). As such, you have been overpaid by a net amount, not a gross one.

If it was me, I'd be asking them to recalculate the wages (hold out for this and they may decide it's not worth the bother, more so if you were overpaid weeks or months ago).

If they do agree to take the cash back net, confirm that they have adjusted your payroll record (rather than leaving your record the same and just accepting a percentage reduction on the gross amount owed). The reason for this is your tax or NI may be incorrect if they don't.

You can check this by asking to see a print of your P11 deduction records for tax and NI. There are loads of people on here who can check it's correct for you.

Sorry of this isn't making sense - I ramble sometimes - feel free to PM if necessary, I'm happy to ramble some more and hope it makes better sense.

organised

Thanks for the info thus far. I have asked for a full breakdown because they have said as above you have been paid e.g 100 hours too much at 5.00. You know have to pay us £500, spread over a period of time. I just don't know how the tax and NI contributions come into play.

withabix

It would be reasonable to pay it back over the same period that it was overpaid.

dori2o

As I said, they should take the money from your gross pay, this will amend the difference in tax and NI.

For example, you get paid £1000 a month, they deduct £25 a month, you would only be taxable on £975 as tax has already been paid on the £25.


Ecactly the same with NIC's

This is the way it should be done.

CarolynH

dori2o wrote: »

As I said, they should take the money from your gross pay, this will amend the difference in tax and NI.

For example, you get paid £1000 a month, they deduct £25 a month, you would only be taxable on £975 as tax has already been paid on the £25.


Ecactly the same with NIC's

This is the way it should be done.

I agree. As long as it goes thru payroll (rather than OP just giving them the cash each month) and as long as the payroll deductions are made PRE tax and NI rather than post.

Organised - if they do this, and you're unsure abou anything, there's loads of folks here who can double check the calculations for you.