I need payroll advice please!

[rootsandwings89]

I really need some help! My employer overpaid me by a large amount in error 3 months ago. This caused my pension contribution to double that month, I paid over £800 in tax, £300 in national insurance and it triggered my student loan and deducted £290.

For clarification, I work part time so earn under the threshold to pay back any student loan.

I alerted my employer and put the net difference into a seperate account so I couldn’t touch it.

We are now in an argument with them because they’re asking me to set up a repayment plan to pay back the full GROSS amount. My understanding is that the tax will balance itself out across the year but the NI and pension contributions will not. So surely in will be out of pocket doing this?

Does this sound right? Can anyone help?

Yes you should not be out of pocket. You will need to pay back the net overpayment.

Yes the NI and tax will balance out. For the pension contribution that will also need to be clawed back - I would contact your pension provider to see what happens there as I'm not a pensions expert.

Is it a company pension scheme or private? If company then they can also sort that out.

The company should also notify the student loan company and work to resolve that for you. They made a mistake, you should not be out of pocket.

If they can’t solve the pension and student loan then the company should classify the difference in payment as a bonus (or compensation) to you by way of apology.

Under no circumstances should you be out of pocket!

Do you have legal cover on a house insurance policy to get a quick half hour free advice?

It's a company pension scheme. I thought NI is calculated based on your monthly pay, not across the year?

I have asked our payroll department for a phone call so many times to speak with them directly. They just keep saying they're too busy and I should agree a repayment plan with my line manager, it's so frustrating.

You're right, the NI won't balance out because it's not cumulative like tax.

You need knowledgeable input to agree a plan. Does your manager have this? Most don't.

NI won't balance out. Income tax will if you repay the salary by the end of March.

Pension could balance if you suspend contributions one month as then it's like they paid the extra month of contributions early . It is unlikely to happen naturally to the right level though.

Student loan is difficult. You have benefited if you were going to pay the loan off. If you reach the age threshold without ever repaying it, the only beneficiary is the govt /student loan company.

I'm shocked that the payroll dept made a huge mistake and aren't involved in fixing it! That's dreadful.

I know, I have a feeling they are hoping I'll just agree to repay the gross amount and say no more. I feel very let down by them. They've never even apologised.

I work for a local authority and nobody can ever get hold of the payroll department. They are aware of my concerns but they've just told me the NI will balance itself out even though I've told them I know it won't.

I definitely won't be able to pay the amount back by the end of March if they don't come back to me which sounds like it will throw another curve ball in with the tax.

I've read online I can repay it within a timescale of 6 years, I'm so tempted to do this just to cause them the inconvenience that they've caused me!

Poor you OP!

If you've tried to resolve this for several months, I think nows the time to raise a grievance in accordance with your employer's grievance policy. If you're in a union, ask for their assistance. I'd put something like the following in the grievance.

Dear X

Grievance regarding salary payment

As you know, on date I was overpaid by £x, as a result of a mistake by the payroll team.

The overpayment resulted in:

• a net overpayment to me of £x;
• an additional pension payment of £x;
• increased tax payment and national insurance payments of £x and £x respectively;
• triggered a student loan repayment of £x.

The payroll department have not apologised to me for this error and instead, have been pressuring me to agree with my manager a repayment plan for the gross overpayment amount of £x. I do not agree to repaying the gross amount, as it requires me to repay amounts that I have never actually received into my bank account (I.e the amounts of the tax, national insurance, pension contribution and student loan).

I have had numerous emails with the payroll team about this and have tried without success on several occasions for them to talk to me, but they refuse to talk to me.

I'm finding the situation incredibly stressful, I can't see any likelihood of it being resolved soon, and I am I raising this formal grievance in the hope that you can please help for this to be resolved.

I am happy to return the amount of £x, which is the net amount that I received into my bank account. I am happy if next month, my pension contribution is reduced by £x, to reflect the amount of the overpayment into my pension. I cannot agree to return the tax, national insurance or student loan payments as I never received those amounts into my bank account and if I were to pay them to employer's name, it would put me in a worse financial position, for a mistake that I did not make, and which I have been trying yo resolve, without success.

I look forward to hearing from you and very much hope that you can assist me in resolving this, as the stress and worry is taking a huge toll on me.

Are you in a union?

This is so helpful thank you!!

If you earn under the threshold surely it won't balance out because you don't currently pay tax. Had they paid the correct amount you wouldn't have paid any and now you have. I'd be saying this was their mistake. They know all the deductions that were made and you will only pay the net figure minus what you were owed for that month. Give them a figure you are willing to pay and go from there

This isn't normal at all, where my company have overpaid people they are simply expected to repay the net amount.

Payroll run a new payslip reversing the erroneous items and calculating the correct pay which will then have negative tax numbers etc. Payroll should definitely be sorting this out for you.