Overpayment at work

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Hi all. Just after a little advice/ past experiences. It looks like I have been overpaid, currently waiting on a response from payroll but usually take it back on the next pay. Now this is fine but I haven’t physically received all the money as I have paid extra in tax/NI/pension/student loans so I have only had just over half of it as actual cash in my bank.

My worry is next month they will take the full amount back and I will be short as I never received the full amount due to extra deductions. January is a hard month as it is without being down extra money due to higher tax/NI payments through no fault of my own. Where do I stand on this?

You can ask for it to be paid back in instalments over X amount of time

My issue is that I haven’t actually had half the money. Half of it has been paid out in tax and NI and pension student loans etc all higher amounts than I would have normally paid. I don’t have any issue in paying back the money I physically have in my bank but why I should have to pay the money back that’s been paid in Tax/NI/extra pension etc it’s not my mistake. Can I ask them to repay the extra deductions?

If they reduce you salary by the overpayment next month, wouldn’t you pay less tax, NI & Student loan? I wouldn’t pay them back by transfer, I’d ask for it to be deducted from your next salary

They should take the overpayment back before tax/NI/pension is taken - so like PP said, you'll pay less on that. Overall it should balance out the same

They'll make adjustments so you'll be no worse or better off than you would have been without their error.

If they take it back via payroll deductions, your pay will be less, so your tax/pension/NI will be reduced by the equivalent you have overpaid. I think it might work out for student loan as well but can't quite picture it quickly in my head, but it will certainly also be reduced.

If you pay it back by giving them a lump sum, then it gets complicated and you'd have to ask them for gross to net calculations so that you only pay back the net.

If you trust them to get it right, definitely do it via payroll as then their software should do all the calculations for you.

Last time I had something similar( but not the same circumstances)they took the money back after tax/NI so paid the full amount and then they deducted money leaving me very short for a month and I ended up borrowing money to get by. That was 6 year ago and I wished I’d argued more at the time.

If they deduct the gross amount next month you’ll pay less tax and ni accordingly. Sometimes the month on month tax / NI adjustments don’t correct perfectly but over the tax year you’ll be no worse off. If you are very exposed to small fluctuations in your take home pay you could ask them to deduct it over a couple of months but it shouldn’t make much difference.

Thanks for everyone’s help 😊

As I said in my previous post I’m just going on a shit experience years ago where they made a big deduction after tax and NI had already been taken, leaving me with very little and I’m just slightly more wary now. I’ll try not to worry!

Ask for it to be split each month between now and March so the tax etc works out correctly over the tax year but it affects you as little as possible. And it absolutely should be out of your gross pay not your net pay so complain if they don't do that.

The adjustment to your salary for the overpayment should be in line with the NET amount you received, not the gross.

The employer should take the net from you and then make an FPS adjustment to HMRC to correct the tax and NI side of things; I'm not too sure re the student loan.

ACAS provides support and advice re overpayment disputes so might be worth giving them a call.