Overpayment - anyone work in HR please

[namechangenumber45]

Hi - I'm hoping for a bit of help and advice before I phone my HR department on Monday.

In July I was overpaid as HR didn't receive my change in grade forms in time - not my fault - just one of those things.

I notified payroll and HR that I had been overpaid and then put what I thought was the right amount of over-payment aside (£800). I calculated this as the difference between my net salary on each different grade.

For example when I was on AA grade I got £2000 net pcm and when I was on BB grade I got £2800 net pcm.

I have kept this money aside and have been waiting official notification of over-payment - which I received today.

The letter however states that I have a GROSS over-payment of £1200 (not the £800 NET I calculated). HR have informed me that this will be taken out of my next salary - in effect leaving me with just £800 left to pay mortgage etc.. I cannot afford for this to happen.

Can someone please explain why they have not given me a NET over-payment figure?

Will I have to pay the GROSS amount and then re-claim taxes and NIC that I have overpaid?

Can they deduct the whole amount in just one go?

If it helps this is the NHS and the matter is being dealt with by an outside agency.

Anyone had similar happen or know what I should expect when I phone - can I insist on just paying the NET amount not the GROSS?

Many thanks.

I work within a HR department and touch on payroll - I don't know where they stand with taking all the money at once but when we overpay we come to an agreement with the individual that suits them so they don't feel the pinch - at the end of the day it's usually a system fault and not that of the individual. I'd maybe have a word with HR and just ask them if you can break it down into install nets. Hope that helps!!

if they are deducting it, will they deduct it pre tax, which will in effect give you the same net result? I think you need to see exactly what they plan to do through payroll what this will mean net for you.

I'm not NHS but do some work in payroll. The gross overpayment should be around the net equivalent you have put aside. They won't necessarily have been able to recalculate your pay to give you a net figure. Presuming you are PAYE the tax/ni contributions should right themselves when the gross deduction is made.

I'm not hr but I think that it will just run through with your tax code (in effect you have already paid part of this months tax).

Would they not deduct the amount gross though meaning you would pay less tax and ni as tough have already paid extra last month? I could be wrong though?

Is it possible that your new lowest salary banding is less net than you thought? £400 tax and national insurance (the difference between net and gross salary) seems a huge amount out of £1200.

You will also have the £800 you have put aside. They will deduct gross and then tax will come off the remainder, I.e. the £800 left which should be much less than usual, you have already paid tax on the overpayment. I don't think I am making much sense though!

Also don't forget that you also have the 800 in your account that you no longer need to pay back to them. That will go towards your 'salary' next month.

Thanks all - think it's making a bit more sense now! Glad I have the £80 saved - but it's finding the extra £400 that will be a slog - I'll ask them to clarify if I pay less tax/NI next time or as PP suggested perhaps ask for a re-payment schedule over a few months.

Payroll works gross. It's not possible to deduct a nett overpayment & without running payroll it will be difficult to work out an exact figure.

You will probsbly get a tax refund showing on your payslip for the month they take the overpayment back.

Thanks Balletgirlmum - will I still get a refund if I pay back in instalments do you think?

Although the gross amount may be deducted, surely the appropriate tax and NI should be refunded, so that the net result is the same?

You will pay less tax and NI this month, significantly less as you will have much less pay this month. You will have paid extra last month.

They work in gross, because until they run it through the payrun they won't know what the nett is. I know that's difficult for you though.

Payroll might be able to help you work out approximately how much it will be, and then if it's unaffordable they MAY agree to spread it a little.

You should get the same over these 2 months that you would have if there hadn't been a mistake (ie it should even out).

The only disadvantage you may have is that unlike tax NI isnt cumulative so if you pay it back in Instalments you won't get back the overpayment of NI

If you pay it back in one go AND that means your pay is less than the earning level for NI then you won't have to pay NI that month & you might work out even.

I work for a payroll provider.
As it was not your fault they CANNOT just take it in one go/ that's very harsh of them. All employers come up with a repayment plan wth the employee (ie a certain amount over a number of months)

The overpayment will be calculated gross not net the. Deducted gross.
Too long to type why they do it this way but it's not less favourable to you so don't worry xx