Employer owes 14 years back pay

Vince1974

I only found out today that my employer made a mistake in calculating my salary over the past 14 years. They agree they made a mistake and will correct it within the next few weeks. Now the question is this:

Do they owe me interest over the money paid (years) too late? If so, what percentage?

There will be a heavier tax burden on money paid now (USC etc), if they had paid me as they were supposed to this salary would have incurred less levies, should they pay me for that?

Thanks!

Stheno

The Revenue have a process for dealing with this, get your employer to contact them, or do so yourself for peace of mind

sawdoubters

http://www.independent.ie/irish-news/agency-health-workers-owed-25m-in-back-pay-28953143.html

lukesmom

Vince1974 wrote: »

I only found out today that my employer made a mistake in calculating my salary over the past 14 years. They agree they made a mistake and will correct it within the next few weeks. Now the question is this:

Do they owe me interest over the money paid (years) too late? If so, what percentage?

There will be a heavier tax burden on money paid now (USC etc), if they had paid me as they were supposed to this salary would have incurred less levies, should they pay me for that?

Thanks!

Nice little lump sum, lucky you!, enjoy

Vince1974

I assume the employer will go through Revenue about this. Hopefully they pay it back with interest.

And yes, it should be a nice lump sum indeed.

Bandana boy

As it appears to be an honest mistake I would not expect interest ,if the mistake was the other way and you owed them money would you expect to pay them interest ?

I would look at it as a savings plan you forgot and enjoy the little windfall.

Vince1974

The salary slip is in. It's not at all taken into account that had the salary been paid as usual it wouldn't have been taxed as heavily as it is now. The employer did not speak to the Revenue at all and recommended us to speak to Revenue. We rang them just now and they say that they see the full back pay as current salary and therefore all deductions are based on that.

Unfortunately no special process for it.

Ray Palmer

Talk to your payroll and point out your concerns that their mistake has cost you more tax and you would like that to be addressed. I don't think you can expect interest.

They very may well say no to paying you more due to tax rises. Although your company does your tax deductions etc... it does not remove your own responsibility to check their figures are correct. I would always tell people to check their payslips. I have been overpay, underpaid, over taxed and under taxed by various companies. I found their mistake and it is why you get a payslip.

Mrs OBumble

Vince1974 wrote: »

The salary slip is in. It's not at all taken into account that had the salary been paid as usual it wouldn't have been taxed as heavily as it is now. The employer did not speak to the Revenue at all and recommended us to speak to Revenue. We rang them just now and they say that they see the full back pay as current salary and therefore all deductions are based on that.

Unfortunately no special process for it.

There IS a special process for it.

But it seems that your currently employers have chosen not to use it.

That siad, the special process can only go back 4 years, not 14. So for 10 of your 14 years there would be no way to fix it.

I can understand that it's frustrrating, but wonder if your best bet is to find something that your employer can do to compensate you for it in some other way. Arguing about changing the tax treatment will be hard and panful.

trad

Similar situation where I work, union - management agreement for 15 minute paid break per shift back in 2010, promptly ignored by management. Got them to start paying up a few months ago but by my calculation they owe me €2k. There's 1500 of us.

Vince1974

How would I be able to make use of the special process if both employer and revenue ignore it? Not sure if going back 4 years would make that much of a difference but any increased benefit is appreciated.

I'll try the route of the employer as well.

ceekay74

Mrs OBumble wrote: »

There IS a special process for it.

But it seems that your currently employers have chosen not to use it.

That siad, the special process can only go back 4 years, not 14. So for 10 of your 14 years there would be no way to fix it.

Do you have any links to information on this special process?

Can you get them to agree to make multiple payments over time? Would that benefit you? (im not too clued into the whole tax world, but i know that when people ive worked with are getting holiday pay owed to them, they often ask for it over 2-3 payments so they're not taxed as heavily on it, but it could just be a myth).

amen

could you get some of it in the form a voucher ? Tax free up €250.00 per year

Mrs OBumble

Vince1974 wrote: »

How would I be able to make use of the special process if both employer and revenue ignore it? Not sure if going back 4 years would make that much of a difference but any increased benefit is appreciated.

I'll try the route of the employer as well.

It's your employers who have to do something to use it. If the employer does it, then Revenue will know what's going on.

I'm not sure of details, just know that there's something which they can do which involves paying you and issuing some sort of additional P45 for the previous year(s) saying that you got money for them handed over to you this year.

Sorry I cannot help more.

Clive

OP, as far as I know your employer must operate under the tax system in the year the payment is made.

If you had left employment and there were arrears due, then your tax liability could be spread back over four years, but not while you are still with the same employer.

I would be making the argument with your employer that you are at a loss due to their error. They should be calculating your net pay for each year if you had been paid properly and paying you a gross amount now such that you will receive the same net under the current tax system.

qdawg86

Bandana boy wrote: »

As it appears to be an honest mistake I would not expect interest ,if the mistake was the other way and you owed them money would you expect to pay them interest ?

I would look at it as a savings plan you forgot and enjoy the little windfall.

If it was their mistake then of course the OP wouldn't be liable for paying them interest !!

m5ex9oqjawdg2i

qdawg86 wrote: »

If it was their mistake then of course the OP wouldn't be liable for paying them interest !!

The question asked was as follows;

if the mistake was the other way and you owed them money would you expect to pay them interest ?

If somehow, the OP had made some mistake and had to pay the company would he expect to pay them interest.

I think the answer in most cases would be no.

Melissa30

As said above you could request that your employer work out the net amount you would have gotten at the time and gross it up so you get the correct net amount now.