Salary sacrifice not applied correctly, now my employer wants overpayment back

[StetsonsAreCool]

Hope someone can help me figure this out... Sorry, it's a bit long.

In 2012 I entered a Salary Sacrifice agreement for Childcare Vouchers with my (then) new employer. Since the first month, the 'salary' part of my pay slip remained unchanged, but 'Childcare Voucher' appeared in the deduction column. I've never thought much about it, just thought it was how it was administered there.

Today, the payroll company used by my employer has dropped a bombshell on the Finance Director to say that due to an error on their part, the employees that receive childcare vouchers have been overpaid. Apparently the error only applies as far back as April 2014. But the structure of my pay slips hasn't changed - apart from tax code changes and pay rise adjustments.

A quick go on Mr Anchovy shows me that, because they've administered the voucher as a deduction after tax rather than a reduction in my net salary, I have indeed been overpaid. It works out at about £150 a month by my calculations.

The payroll company wanted to recoup the overpayment in one go in September (bye bye £800, more than half of my gross monthly salary). The FD said she wasn't happy with taking the overpayment back in one go and that they'd split it over 12 monthly installments.

Problem is, I'm going on Maternity Leave in December for 9 months. I don't think they can deduct the overpayments from SMP (no additional company maternity pay) can they? So when the hell am I supposed to pay this back?

It's completely the payroll company's fault, and I'm feeling pretty resentful at me being the one to have to stump up the cash to fix it - even though logically I know it's not my cash because it was paid in error, it's still annoying because they shouldn't have got it wrong in the first place!

Has anyone got any advice about the technicalities of repaying overpaid salary? I'd like to go back tomorrow armed with a bit more information, as although I'll be talking directly to the payroll company tomorrow I don't really trust them to get their facts right now if they've already got it so wrong...

Lovely to hear about LFD - they so often get slated. GLad to hear you persevered and have a good outcome

That's fantastic news! I was reading the first bit open mouthed, but what great news about the LFD and what it means for your mat leave.

So a mistaken overpayment has led to a far better package :o

Always nice to have a happy ending.

Oh and do double check that the payroll calculates your pension properly.

You will pay your contributions based on whatever your actual pay is during mat leave, but your employer's contributions should be calculated and paid based on your normal salary (and any extras you get as standard) for your entire smp period.

So for example, if your normal pensionable pay is £1000 a month, and you pay 5% and your employer pays 10% then you would normal pay £50 and your employer would pay £100 into your pension.

If whilst on mat leave your pay drops to £500, then you would contribute £25, but your employer would still contribute the full £100.

You probably know this already, but since your payroll is so rubbish, I would make sure it is done.

Thanks FYC, very useful knowledge to be armed with! Every little snippet can only go in my favour. I will keep an eye out for the pension. To be fair, they actually said something very much along those lines this morning, but I couldn't work out what she was getting at, so thank you for that.

I'm still trying to get my head round my change in fortunes. It's just so unlikely, implausible and unexpected! When she told me I did that open mouth thing while my brain caught up with what she was saying.

They are a very generous employer at the best of times, but this rewrites the book a bit!

Ps, did your festival happen? I read your thread pre-horse-eviction but didn't keep up with what happened next.

Stetsons :) it never happened in a literal sense, but it's still being discussed and planned (or at least we chat and drink wine). Pop in any time.

It's so nice to hear about an employer who cares for their employees.

I will pop in and say hi then next time I see your thread on Active Convos

That'd be grand :)

Good luck with the baby and let's hope it all goes smoothly from here on in!