Employer overpaid my salary, they want gross not net?

lightspeed

So basically, my employer has overpaid me of the past few months after i changed my hours. However, they are expecting me to repay the gross amount a not the net?

Is this correct?

Can i claim back the tax i paid or should it be the employer who needs to obtain a PAYE refund for amounts overpaid?

TheChizler

Your employer's pay system will take care of it, I presume your tax is deducted at source?

lightspeed

TheChizler wrote: »

Your employer's pay system will take care of it, I presume your tax is deducted at source?

What you mean will take care of it?

They have shown me the total gross amount i owe and say they want me to pay it back over the next few months, They want the gross amount but I didnt get that full amount as a bulk of that was taxed.

So am i due a refund of from revenue for the tax paid on the overpaid salary?
Should my employer only be entitled to deduct the net amount and then contact revenue for difference as result of tax that should not have been due on the overpaid amount?

TheChizler

lightspeed wrote: »

What you mean will take care of it?

They have shown me the total gross amount i owe and say they want me to pay it back over the next few months, They want the gross amount but I didnt get that full amount as a bulk of that was taxed.

So am i due a refund of from revenue for the tax paid on the overpaid salary?
Should my employer only be entitled to deduct the net amount and then contact revenue for difference as result of tax that should not have been due on the overpaid amount?

Most likely your employer's system will take care of all dealings with revenue, they can just deduct a portion of your gross pay per week from your earnings. Are they asking for you to actually pay them money though?

lightspeed

Yes its near €2500 and they want to deduct it from my salary over next 5 months. Im willing to work up the hours but i dont want to repay the gross as if i have received that amount in total overpayments as the reality is that there was obviously tax etc paid from that so that was not what i received.

Stheno

lightspeed wrote: »

Yes its near €2500 and they want to deduct it from my salary over next 5 months. Im willing to work up the hours but i dont want to repay the gross as if i have received that amount in total overpayments as the reality is that there was obviously tax etc paid from that so that was not what i received.

When they deduct that figure from your gross it will adjust the tax and peso and had that you pay so you'll pay less

nc19

I had this happen a good 12 years ago. Holiday pay paid 2 weeks longer than it should. Boss told me I owed him the gross. I disputed it but I was only a young lad and didn't know my rights and was afraid I'd lose the job.

I don't see how they can expect you to be out of pocket for their mistake

lightspeed

lightspeed wrote: »

Yes its near €2500 and they want to deduct it from my salary over next 5 months. Im willing to work up the hours but i dont want to repay the gross as if i have received that amount in total overpayments as the reality is that there was obviously tax etc paid from that so that was not what i received.

It's been mentioned a few times now that your employer's payroll system should take care of everything. In the event that it doesn't you can get a balancing statement from Revenue who will refund you if you have overpaid on your tax for the year.

Even if they take the gross amount, you'll be fine.

ardmacha

If the employers reduces subsequent pay to recover the overpayment then that will reduce the tax paid as well and things will balance out, so no problem. I imagine they are not proposing you hand back cash?

davo10

nc19 wrote: »

I had this happen a good 12 years ago. Holiday pay paid 2 weeks longer than it should. Boss told me I owed him the gross. I disputed it but I was only a young lad and didn't know my rights and was afraid I'd lose the job.

I don't see how they can expect you to be out of pocket for their mistake

Just so you are clear, deductions go to revenue, the employer doesn't keep that money. The gross is repaid and the deductions are reimbursed by revenue ie they were deducted and now they will be credited to op's file so he/she will have less deducted going forward.

Goofy

Am I right in saying that they will deduct the gross amount owed from the gross amount you earn and as a result you will end up paying less tax from now on. It will all balance out by the end of the year and you wont be out of pocket.

Does the same apply for prsi and usc? I thought they were deducted on a week/month basis unlike tax which is cumulative.

lightspeed

Does it complicate things that im planning on leaving in the next few months?

Im find it hard to understand how i would be due a refund from revenue as revenue would be entitled to tax from the gross amount paid which is what was paid.

So this not the case that i was overcharged PAYE, USC or PRSI on my earnings. Would revenue or NERA (National Employment Rights Authority) be the best people to confirm this?

Anything i ring revenue, the person on the phone never seems to be sure and from experience ever querying anything with NERA, they just seem to read from what is on citizens advice website.

davo10

lightspeed wrote: »

Does it complicate things that im planning on leaving in the next few months?

Im find it hard to understand how i would be due a refund from revenue as revenue would be entitled to tax from the gross amount paid which is what was paid.

So this not the case that i was overcharged PAYE, USC or PRSI on my earnings. Would revenue or NERA (National Employment Rights Authority) be the best people to confirm this?

Anything i ring revenue, the person on the phone never seems to be sure and from experience ever querying anything with NERA, they just seem to read from what is on citizens advice website.

When you leave a job, you are issued with a P45 which has all your tax details up to the day you leave. Your weekly deductions are calculated with a view that they are paid over a whole tax year, if you leave then revenue recalculate your tax credits and deductions, your refund if you have overpaid, will be included in your last paycheck.

Clauric

lightspeed wrote: »

So basically, my employer has overpaid me of the past few months after i changed my hours. However, they are expecting me to repay the gross amount a not the net?

Is this correct?

Can i claim back the tax i paid or should it be the employer who needs to obtain a PAYE refund for amounts overpaid?

You have a lot of good answers here, but there seems to be some confusion as to what you are asking compared to the answers you've received.

I'm going to try and break it down for you in a simple way.

Your employer over paid you by 2,500 (gross). They want it back over 5 months. This means they would like 500 (gross) a month for the next 5 months. So far so good.

If you agree to it, your employer's payroll software will do something very similar to this:

Gross pay per month = 2,500 (for example)
less overpayment = 500
Gross taxable pay for this period = 2,000

This means that you pay less tax, PRSI, and USC. The system will calculate these automatically.

There is one or two things to note.

1) You're employer and yourself need to agree any amount before it is deducted from your wages. If there is no agreement, then they can't legally deduct any money.

2) If you are leaving in less than 5 months, and you agree to let them deduct the money, in your last pay packet, they'll deduct all the remaining amount due

3) Your PRSI, USC, PAYE will all be corrected by the payroll software, so the amount you've overpaid will reduce. If you're not happy that the calculations have been done correctly, ring Revenue Feb 2016, and ask for a balancing statement. If there is a mistake, it will be a nice post Christmas present.