Overpaid wages

[Pudney]

Total nonsense in regards tax.

Its irrelevant if it covered 100 tax years as long as the employer has collected and paid the correct taxes on the remuneration that matches the periods in which they were paid.
There can be some issues on VERY large amounts clearly not paid on time which are clearly mean't to impact the revenue, but even those are very rarely progressed since its very rare that the specific date something must be paid is ever contracted.
Every year for example I can delay my annual bonus from March to April, we allow this and the revenue have no issues. Some will do so in order to change their annual tax exposure, pension contribution limits etc.
Its well publicised that when tax changes employers actually bring forwards or defer large amounts to another tax year for the benefit of their employees. You can find numerous articles in the press from the last time the highest PAYE tax rate changed.
The revenue refer to this since they can see unusual large amounts mvoing forwards or backwards as a result of the change (see tax briefing notes published on the cashflow section when these things are announced)

Its generally a contractual term to inform your employer should you KNOWINGLY be overpaid. Whether that is a disciplinary and whether the employer could make it stick very much comes down to whether the employer can prove knowingly or not.
If they can prove knowingly then then can take the defraud the employer angle. It very rarely happens as the employer is deemed to be the expert and the employee not in these cases, and as such the expert is expected to be able to deliver higher standards than the non expert.
Something you clearly shouldn't get such as say sales bonus if your shop floor, or overtime when your not allowed to nor did you claim it, can be argued to be knowingly aware if they are material enough to clearly have triggered vastly different net pay amount.
Many people will not check payslips and Ive seen a case where this was accepted as reasonable defence.

Its actually fairly normal for a payment plan to be suggested to match the amount of the overpayment. So if they over paid by £50 a month then they will deduct £50 per month.

The issues with taxation aren't whether it's acceptable or not, it's merely the administration of PAYE for correcting earlier years versus correcting in year. One is easier than the other.

 

[thenewoc]

If it were a problem straggling the next tax year they could issue you with a zero percent APR loan and use that to repay payroll and then just repay the loan over the agreed period. All the tax and NI could be sorted out upon releasing the loan which would go direct to payroll and bypass the employee.

 

[Mercenary Keyboard Warrior]

The issues with taxation aren't whether it's acceptable or not, it's merely the administration of PAYE for correcting earlier years versus correcting in year. One is easier than the other.

Its not a correction of PAYE thats the point
A correction would refer to a PAYE deduction or not thereof that meant the incorrect amount of PAYE had been deducted in regards to the total amount paid

In this case (Assuming its as listed) the employer had made an incorrect gross payment but the calculation of the net was correct, and hence the tax is correct. (unless I have mis read and the employee has been paid untaxed wages?)

IF they had somehow calculated the wages and taxation on the correct amount, but in fact paid the employee a different amount (hence triggering a payment of the incorrect tax amount compared to gross "pay") then yes i agree they would have an issue in regards tax that should ideally be resolved in the current tax year and suitable notifications made.

PAYE is required to match the amount paid, not the amount due.

Payroll systems (large) always reconcile the amount paid gross, the deductions and the net amount paid to the employee. Will typically issue warnings where outside expected rages etc.
They will then also spit out the information required to be submitted to HMRC, obviously now more than often this is monthly electronically but used to be for completion of paper based documentation.

 

[Pudney]

Its not a correction of PAYE thats the point
A correction would refer to a PAYE deduction or not thereof that meant the incorrect amount of PAYE had been deducted in regards to the total amount paid

In this case (Assuming its as listed) the employer had made an incorrect gross payment but the calculation of the net was correct, and hence the tax is correct. (unless I have mis read and the employee has been paid untaxed wages?)

IF they had somehow calculated the wages and taxation on the correct amount, but in fact paid the employee a different amount (hence triggering a payment of the incorrect tax amount compared to gross "pay") then yes i agree they would have an issue in regards tax that should ideally be resolved in the current tax year and suitable notifications made.

PAYE is required to match the amount paid, not the amount due.

Payroll systems (large) always reconcile the amount paid gross, the deductions and the net amount paid to the employee. Will typically issue warnings where outside expected rages etc.
They will then also spit out the information required to be submitted to HMRC, obviously now more than often this is monthly electronically but used to be for completion of paper based documentation.

My assumption is that the OP's partner has received £x+£30 per month net. To achieve this I would have expected the gross to be overstated by £30 plus IT/NICs. That's why it would be a PAYE issue, because the gross is incorrect along with the corresponding PAYE/NIC.

Payroll isn't my thing but the above is how I typically understand a normal overpayment will be created. Other scenarios may exist!

 

[Mercenary Keyboard Warrior]

I just had a look in Croner and typically their example is a little annoying

Their general comments on pay issues are fix the FPS (full payment submission) on the next return or make an extra submission.

In the case of a intentional overpayment it mentions "the mistake must be corrected in the next FPS by reporting the correct total payments and net tax to date." Which again smacks of they are assuming what you have declared isnt what you have paid

The argument I have always seen from payroll managers is that when the payment was calculated (ie to both employee and revenue) it would have been correct in absolute terms as far as the deductions compared to what was actually paid.
When at a later date something is detected and an agreement made to say deduct £100 per month from an employees gross pay then that is (now) also contractual and as such its no different to any other part of their contractual package and as such should be correctly liable to taxes at the point of payment.

 

[Pudney]

Hmm, not sure about that. Overpayments do not create an entitlement for the recipient, that’s why they’re repayable by the employee. A tax liability should reflect the earnings and a mispaid amount isn’t earnings. Payroll managers may take the path of least resistance though

 

[mattyg]

If you overpaid someone
You have the right to deduct money from an employee’s pay if you recently made a simple overpayment. Speak to them and let them know how you're going to claim it back.

If the overpayment was a long time ago, or overpayments have been going on for several weeks or months, you should:

• be flexible and fair claiming the money back
• agree a repayment plan if needed

If you cannot agree a repayment plan, you should not simply deduct money from their wages.

The law can be complicated in this area so you can speak to an Acas adviser to discuss your options. We cannot give legal advice.

 

[b0rn2sk8]

If they took the £500 in one hit would it take her to under min wage.
That they cannot do

How so?

She's been paid too much minimum wage doesn't come into it afaik

As a general rule an employer can’t pay below minimum wage. However in the case of a previous overpayment I believe they can pay below to recover it.

As others have said, if they don’t come to a reasonable payment plan they could in theory sack her but I doubt it would come to that. It would cost the employee more than £500 if they got sacked and it rarely gets to that point.

However deducting £500 from one pay period is pretty brutal for most people. Most people don’t earn huge amounts of money, £500 would be more than 1/4 of the gross pay for more than half the population. £100 which would work out to less than £70 net (assuming standard rate) a month would be far more reasonable and would clear it by March.

Also just because someone earns more doesn’t necessarily mean it’s reasonable to take the full whack either. It’s reasonable to expect someone who earns more also has more fixed outgoings (e.g. bigger mortgage). But I do understand the view of the employee want to get their money back ASAP but £500 isn’t really material to a business with lots of employees compared to the impact on the individual.

 

[Hedge]

Being overpaid wages and not declaring it to HR is a disciplinary offence in some places.

Also if you don't have £500 in savings for emergencies like this what would you do if your car, boiler, TV, oven or shower broke?

It's £250 each shouldn't be too hard to cough up. Then you have learned a valuable lesson to put money away just in case.

You seem to be getting more ridiculous by the day. You are really embracing your strange online persona.