To not pay back all the overpaid salary?

[M3lon]

I've been overpaid for 3 months due to system malfunction (apparently).

Now my employers wants the money back, but they want the gross salary error back rather than the bit they have mistakenly paid to me. Is it really on me to pay back everything they have miss paid, including the additional money paid to HMRC, pension fund, national insurance etc? Or do I just owe them back what they have mistakenly put in my bank account, and its on them to chase the rest of the money they have paid out incorrectly?

It feels pretty unfair to put me into debt while I chase around to get their money back from the people they sent it to in error?

Yes you have to pay it back
Why would this put you into debt though have you spent it? Didn’t you realise it was too much?

Try to agree a repayment plan with them so they don’t take it all in one go

This happened to me once op. You do have to pay it back but it’s better to go to your employer and plead your case. Mine actually said I only had to pay back half as it had affected my child tax credits badly

I've had this happen to me a couple of times in different roles and checked with citizens advice bureau. I think you have to pay it back as you weren't entitled to it but they can't demand it all in one go and should work with you so you aren't left in financial difficulties.

they paid me ~1100 pounds and they want back ~2000 pounds

Thats why it would put me into debt.

I can pay back the extra 1100 that turned up in my account but the rest of it is elsewhere....

That seems really unfair, I would get advice from this from citizens advice because it may be that you get the tax back automatically but this might not be for ages.

I think if it was the just the tax I would be alright because I think HMRC could sort it...but I have no idea how to retrieve an overpayment from the pension system. Its a work based pension not private so all the deductions are made automatically before it comes anywhere near my account.

Can they do it over a few months from your wage?

For example, they pay you £200 less, you pay £90 less to deductions and take home £110 less a month?

But hold on, re the tax, the employer will sort this with HMRC

www.gov.uk/payroll-errors/correcting-payments-to-hmrc

So many people not reading the post - OP says they're also chasing for the tax they paid HMRC, NI etc.

OP - do you have a union? If not could you call ACAS for advice?

For now I would pay back the £1,100 and write them a letter (keep a copy) to say you don't have the remaining £900 and you're seeking legal advice.

Does OP legally have to chase HMRC and NI for repayments made in error by her company on her behalf, and to pay those contributions back herself before she has clawed them back from the tax offices?

I'd go to your employer with the money they gave you by mistake and ask them to freeze repayment of the rest until it is returned to you by the various places it was sent to.

If they don't, you could end up in debt and incurring ban charges through no fault of your own.

Did you not realise?

No I didn't realise - more fool me. But the money isn't spent - I can repay it, just not the money that they didn't give to me in the first place.

For the pension overpayments, your employer should just be able to reduce/stop their employer contributions by the same amount they've overpaid - you shouldn't have to pay this back to your employer.

If they want their overpayment of pension contributions back then they can reduce your ongoing pension contributions to even it out over the year. Who does your payroll? You need to talk to them

thanks growling, I didn't think I'd been totally unclear but was starting to doubt myself!

You have it exactly.

You 100% will have to pay back and you will find that there will likely be a term in your contract stipulating about paying back such things. I strongly recommend you get in touch with HR and agree a payment plan ASAP, as they will have the right to take the lump sum out of your next wage if no agreement is made (and assuming there is that term in your contracts, which I'd be shocked if there wasn't)

Although you didn't physically get the other money into your account, you have had the benefit of it as it will be in your pension pot, your NI pot etc. Your employer will have had to pay a higher rate of PAYE for your NI contributions etc. So although you didn't have the cash to hand, it did go to you

As others have said, you could attempt to come to either a payment plan for deductions over 3-6 months, or to agree a lesser amount to be paid back due to their error i.e. their error having an effect on benefits such as Tax Credits etc. They will likely ask for proof of any such consequential effects to benefits so only try this route if it is true, as you could end up looking way worse if it turns out to be a fib.

No. I'm responsible for payroll at my workplace - if I overpaid you, I would expect you to repay your net salary (and I'd apologise for making the mistake in the first place!), but it would be my responsibility to rerun the payroll reports, and contact HMRC and the pension company to rectify my mistake. In effect, this would probably just mean making an adjustment and a lower payment at the next payment period. I don't know your role or background, but I wouldn't expect any of my team to undertake those tasks as it's not the type of task they normally perform and there would be real potential for further errors.

If you're happy to pay back in one go, then they can just make a year-to-date adjustment to your pay in your next payslip and it should fix everything.

No, you give back the net bit - the error is their to adjust with the IR and NI , DWP etc.

But. Remember they control your salary, they must just deduct as they see fit. It will all even out at the end of the year, but thats a long way off

I didn't want to query payroll people until I knew if this was just the way the world works or not.

This has never happened to me before so for all I knew you are expected to fork out for mistakes in payroll!

I will certainly contact them to indicate I'm unhappy about the idea of repaying money that never came to me.

The overpayment will be processed through the payroll system. You were overpaid £2000 gross and the deduction will also be £2000 gross. So net figure you pay back will also roughly equal £1100. The pension and taxes will re-adjust as your next deductions will be based on a lower gross salary (meaning you won't pay more than you should within the financial tax year). Did they propose a payment plan?

Ynbu. You pay the net and payroll should just not pay the deductions until the overpayment is paid back.

@PookieDo they are asking her to pay back money she never got, that is why she would go into debt. Tax ni and pension is paid on her behalf and need to be adjusted by payroll

Does OP legally have to chase HMRC and NI for repayments made in error by her company on her behalf, and to pay those contributions back herself before she has clawed them back from the tax offices?

No. They pay the following month minus the overpayments and the rest should all adjust accordingly. Speak to payroll, this sounds ridiculous.

No I get that, I rushed my reply!

You did benefit from it although you didn’t have it to physically spend - it will need to be returned but not by you personally from HMRC and pension, payroll will sort that out.

Won't the tax sort itself out anyway.

I would only query the NI, the pension should fairly easy to sort out with a reduction for the reduction until it's paid back.

This must happens loads, you don't need to re-invent the wheel just discuss it with your payroll department.

The simplest thing would be for your employer to underpay you for a couple of months, so that your total salary for, say, 5 months (including the last 3 when they overpaid) was the correct amount. That way the amount paid to HMRC/pension will be correct too.

Alternatively they claim back the tax & NI money from HMRC, they talk to the pension provider about getting that money back, and you pay back the net amount overpaid - make sure they give you a receipt.