Overpaid?

RiseToMe

Hi Guys,

Handed in my notice to a place where I work PT, I am self employed director in my own company as well (so PAYE worker there too). Director called me in today to say that he had noticed that they had been overpaying me since January (I started in Nov) to the tune of about 4 grand total.

It gets a little more complex as he cant seem to recall what they offered salary wise and honestly, neither can I, it was almost a year ago and I was in Tesco when they called (salary didnt matter to me I needed the position to satisfy other requirements for a course I teach so it wasn't a defining part of the conversation).

This teamed with the fact that I was never given a contract so I was unknowingly over paid for this time. I didnt notice as I was paid the exact same every month (in November/Dec it was higher as I had tax credits) every month it was consistently the same figure.

He has given me two options:
Work until the end of the year for free (!!!!)
Or pay back the 4000.

In theory I think I have to pay it back? However I have issue with the fact that I will not have seen most of that 4000 myself, I will have paid 50% in taxes as it was all taxed at the higher rate, so where does that leave me?

I have sought legal advice however I would like a couple of views on this as I am waiting on calls back and this is stressing me out big time.

RFOLEY1990

RiseToMe wrote: »

Hi Guys,

Handed in my notice to a place where I work PT, I am self employed director in my own company as well (so PAYE worker there too). Director called me in today to say that he had noticed that they had been overpaying me since January (I started in Nov) to the tune of about 4 grand total.

It gets a little more complex as he cant seem to recall what they offered salary wise and honestly, neither can I, it was almost a year ago and I was in Tesco when they called (salary didnt matter to me I needed the position to satisfy other requirements for a course I teach so it wasn't a defining part of the conversation).

This teamed with the fact that I was never given a contract so I was unknowingly over paid for this time. I didnt notice as I was paid the exact same every month (in November/Dec it was higher as I had tax credits) every month it was consistently the same figure.

He has given me two options:
Work until the end of the year for free (!!!!)
Or pay back the 4000.

In theory I think I have to pay it back? However I have issue with the fact that I will not have seen most of that 4000 myself, I will have paid 50% in taxes as it was all taxed at the higher rate, so where does that leave me?

I have sought legal advice however I would like a couple of views on this as I am waiting on calls back and this is stressing me out big time.

if he doesn't know how much he was supposed to be paying you and has no contract to back him up how could he have been over paying you legally?

Gaillimh1976

If you were being paid the same all along, why is it an overpayment from January not November ?

Would 4,000 be a significant % of the overall salary (are we talking 4K from a 18-20K total or a 50-60K total or a 80-90K total )

To be honest I doubt they have a leg to stand on with no written contract in place, you would be well within your rights to keep the money, but depends whether you want/need to part on good terms with these people

RossieMan

Offer half as a good will gesture. I wouldn't be returning the whole lot without a contract stating up salary.

BrokenArrows

RFOLEY1990 wrote: »

if he doesn't know how much he was supposed to be paying you and has no contract to back him up how could he have been over paying you legally?

Exactly.

If you don't know, and he doesn't know how much you should have been paid and you have no contract I would argue that you were paid what you were paid. End of.

However if you do end up paying the money back then there is the issue of Tax etc.
You dont technically owe 4k but will probably have to pay that back and then claim the excess from the tax man.

Alkers

RossieMan wrote:

Offer half as a good will gesture. I wouldn't be returning the whole lot without a contract stating up salary.

RossieMan wrote:

Offer half as a good will gesture. I wouldn't be returning the whole lot without a contract stating up salary.

Don't think you should do this. Ask for clarification of the situation in writing and take it from there. If you're going to pay it back, pay 5e a week or month.

RiseToMe

Thanks for the replies so far guys,

In November I was only paid for the few days that I did for that pay month, in December I apparently did extra days (I honestly dont remember!!) So the mistake was January onward.

I genuinely don't recall the salary offered to me (when filling in my starter form I handed it back with the element blank and told my manager I had no idea what I was offered!). He asked me today if i could recall what they offered so i was honest and he said he thought it was X pro rota and on that basis I was being over paid. He seems to think it they may have put me down as working 3 days when I was working only 2 but my payslips say 16 hours which is two days.

Obviously I'm not going to work for free until the end of the year- I am leaving for a reason, so the paying it back seems like the only option-my issue is that most of it never reached me, it was sucked up by the tax man!

I dont know if legally I can just walk away and not pay it back from googling a bit- not accurate I know but as I said, I am awaiting the legal position call which may take some time!

Stheno

Are you still working there?

macnug

Don't pay it back, if he wants it back let him go the legal route and incur the cost to find out without a contract he hasn't a leg to stand on.

RiseToMe

Stheno wrote: »

Are you still working there?

I handed in my notice last week- no contract so legally only had to give them a week but gave them a month as goodwill as the staff turnover is high and they are very stuck for staff

Dial Hard

Am I the only one who's actually mind-boggled at the idea of someone not knowing what money they had agreed to work for???

Stheno

RiseToMe wrote: »

I handed in my notice last week- no contract so legally only had to give them a week but gave them a month as goodwill as the staff turnover is high and they are very stuck for staff

SO you are still getting paid by them?

Will you earn enough to cover what you owe between now and when you leave?

RiseToMe

Dial Hard wrote: »

Am I the only one who's actually mind-boggled at the idea of someone not knowing what money they had agreed to work for???

I am self employed- I earn what i need from my own company. As i said in my OP, I needed this job to satisfy the requirements of a teaching position I also held, so pay wasnt a factor. The only things I required and was concerned about was flexibility around my full time job and clinical exposure to satisfy the teaching requirement.

StupidLikeAFox

If he can't remember the offer and you can't remember the offer, who is saying you were overpaid?

RiseToMe

Stheno wrote: »

SO you are still getting paid by them?

Will you earn enough to cover what you owe between now and when you leave?

No I wont, I only have one pay cycle left and as I am taxed at full rate and only do 8 days per month for them the amount owning over 9 "overpaid" months versus one months pay is not enough to pay them back in full

Stheno

RiseToMe wrote: »

No I wont, I only have one pay cycle left and as I am taxed at full rate and only do 8 days per month for them the amount owning over 9 "overpaid" months versus one months pay is not enough to pay them back in full

Are all of your tax credits allocated to your primary job in your company or are they split between that and this job?

RiseToMe

StupidLikeAFox wrote: »

If he can't remember the offer and you can't remember the offer, who is saying you were overpaid?

Thats kinda also where I am at with it also, he reckons his offer wouldve been around X per annum based on what others in my position are on, instead when he seen I was Y he came to the conclusion that as it was filled in as pro rota rate he mustve paid me for 3 days per week and not 2.

endacl

Tell him that, according to your records, you were underpaid. Make up any old figure you like.

RiseToMe

Stheno wrote: »

Are all of your tax credits allocated to your primary job in your company or are they split between that and this job?

All of my tax credits are allocated to my primary job, none for this company as the pay was negligible and not neccessary

Stheno

RiseToMe wrote: »

All of my tax credits are allocated to my primary job, none for this company as the pay was negligible and not neccessary

And is the overpayment he claims net or gross pay?

RiseToMe

Stheno wrote: »

And is the overpayment he claims net or gross pay?

Gross

Mrs OBumble

RiseToMe wrote: »

All of my tax credits are allocated to my primary job, none for this company as the pay was negligible and not neccessary

So the pay is negligible, yet you got overpaid 4k in eight months, and no body noticed until now.

Ahh, how exactly???


Someone is extracting the urine here.

moc moc a moc

Tell him to take it out of the dosy accountant's salary instead

RiseToMe

Mrs OBumble wrote: »

So the pay is negligible, yet you got overpaid 4k in eight months, and no body noticed until now.

Ahh, how exactly???


Someone is extracting the urine here.

The pay is negligible to me with respect to what I am paid through my own company, therefore I allocated my full tax credit to my own salary. It went unnoticed to me as I took what I was paid every month as what I was supposed to be paid. It didnt change, so it wasnt a once off payment of 4k that arrived that I didnt notice. And in reality of that 4k only 2k of it reached my bank over 9 months after tax.

Tiddlypeeps

Mrs OBumble wrote: »

So the pay is negligible, yet you got overpaid 4k in eight months, and no body noticed until now.

Ahh, how exactly???


Someone is extracting the urine here.

That's only an extra 500 a month, which if the boss thinks is a 33% over payment means the total pay was around 1,500 a month. After the tax man has had his way that only leaves about 700 a month. If you already earn a decent salary from another job then 700 extra a month isn't likely to be a meaningful amount. That doesn't negate the annoyance of being asked to fork out over 4k in one payment tho, especially when the conditions around the request are so shaky.

@OP I would just tell your boss in the politest way possible that you won't be paying back anything until he proves there was in fact an over payment. "I don't think I would have paid you that much" is not a good enough position to be demanding someone pay them anything, let alone 4k.

RiseToMe

Tiddlypeeps wrote: »

That's only an extra 500 a month, which if the boss thinks is a 33% over payment means the total pay was around 1,500 a month. After the tax man has had his way that only leaves about 700 a month. If you already earn a decent salary from another job then 700 extra a month isn't likely to be a meaningful amount. That doesn't negate the annoyance of being asked to fork out over 4k in one payment tho, especially when the conditions around the request are so shaky.

@OP I would just tell your boss in the politest way possible that you won't be paying back anything until he proves there was in fact an over payment. "I don't think I would have paid you that much" is not a good enough position to be demanding someone pay them anything, let alone 4k.

Got it in one Tiddlypeeps, total pay was 1500, minus taxes meant that overall the amount wasnt make or break for me.
Owning to the fact that my tax credits are used on my own salary, my teaching salary is self declared in addition to this, the fact that I didnt notice is not unusual, my tax situation is a little beyond normal.

My main gripe with this whole thing is paying him back 4k when I only seen at most 2k of it (if even!). I only have 2 more weeks of work there and only 1 pay day so therefore it wont be corrected by Revenue by just doing a deduction each payday and it balancing out.

IrishZeus

Op,

Your employer hasn't a leg to stand on. No contract, no written agreement - nothing.

Repayment depends on you. If you decide for your own reasons to repay it, then so be it. If you decide not to, they have no recourse to force you to.

This will end up being more of a moral conundrum for you than a legal one I suspect.

RiseToMe

IrishZeus wrote: »

Op,

Your employer hasn't a leg to stand on. No contract, no written agreement - nothing.

Repayment depends on you. If you decide for your own reasons to repay it, then so be it. If you decide not to, they have no recourse to force you to.

This will end up being more of a moral conundrum for you than a legal one I suspect.

At the end of the day I have my own company, I know how much of pain something like this could be, so I would like to pay it back if he feels its owed.

The big issue is that I'm leaving, so I cannot let it be deducted and let the tax issue balance out, so all I'm left with is the option to pay 4k but only 2 of that actually made it to me, so why should I be even more out of pocket?

From his view, hes 4k down and he wants it back in full.

TheChizler

If you did that wouldn't you just claim the other 2k back from Revenue? It they can provide proof you were overpaid by 4k.

OldMrBrennan83

This post has been deleted.

Tiddlypeeps

RiseToMe wrote: »

At the end of the day I have my own company, I know how much of pain something like this could be, so I would like to pay it back if he feels its owed.

The big issue is that I'm leaving, so I cannot let it be deducted and let the tax issue balance out, so all I'm left with is the option to pay 4k but only 2 of that actually made it to me, so why should I be even more out of pocket?

From his view, hes 4k down and he wants it back in full.

If you do pay back the 4k then as long as your employer reflects it in your P45 then you should be able to claim back any extra tax you paid from revenue in a fairly reasonable amount of time. It used to only be a couple of weeks turn around time for claiming back things like emergency tax, which should be a similar enough scenario to this, but I haven't had to deal with them in a while so no idea what they are like speed wise these days.

RiseToMe

Tiddlypeeps wrote: »

If you do pay back the 4k then as long as your employer reflects it in your P45 then you should be able to claim back any extra tax you paid from revenue in a fairly reasonable amount of time. It used to only be a couple of weeks turn around time for claiming back things like emergency tax, which should be a similar enough scenario to this, but I haven't had to deal with them in a while so no idea what they are like speed wise these days.

Ok so when it comes to P45 time he reduces whatever it is they've paid me over the 10 months by 4k and then I do a balancing statement? It wont matter that the payslips for the 10 months amount to a larger amount?

dilallio

RiseToMe wrote: »

Thanks for the replies so far guys,

He seems to think it they may have put me down as working 3 days when I was working only 2 but my payslips say 16 hours which is two days.

I am assuming that these payslips are produced by your manager's company and not your own company.

If your payslips say 16 hrs (2 days), then he cannot claim or even think that you were getting 3 days salary instead of 2.

In the absence of a contract, what's written on the payslips becomes a lot more important in determining the actual arrangement.

If it were me, I would point this out, and ask him to clarify his company's position in light of this information. He would be wise to ask for a greatly reduced figure, but you're under no obligation to agree to a reduced amount.

Tiddlypeeps

RiseToMe wrote: »

Ok so when it comes to P45 time he reduces whatever it is they've paid me over the 10 months by 4k and then I do a balancing statement? It wont matter that the payslips for the 10 months amount to a larger amount?

That would be my understanding of it. If for some reason you need the details of what went down spelled out you could ask your employer to include the correction in your final payslip, so the final payslip would say your net pay was a negative amount. But as far as I know P45 is all that really matters.

sondagefaux

OP, will you come and work for me? You sound like the ideal employee...

RiseToMe

sondagefaux wrote: »

OP, will you come and work for me? You sound like the ideal employee...

Because money doesn't motivate me? Or because I'll pay you back if you overpay me?:p

RiseToMe

Tiddlypeeps wrote: »

That would be my understanding of it. If for some reason you need the details of what went down spelled out you could ask your employer to include the correction in your final payslip, so the final payslip would say your net pay was a negative amount. But as far as I know P45 is all that really matters.

Thanks, this is the kinda of info I need, I'll ask him if this is something he can organise (this is a worldwide set up where salaries are done for each office by that office but all centralised in terms of payments and payslips, P45s etc).

There is a chance he wont want to go this route as it may trigger audits, so I will offer to pay back 2k (4k minus the tax I paid on it)

bilbot79

IT all sounds incredibly dodgy and there I actually a small risk he is defrauding you. Laundering cash by under/over reporting salary and/or tax??

brownian

Cleaner all round just to say no. Your own tax status looks dodgy, from the point of view of any serious audit, if for no documented reason you pay your employer 4000 euro.

On another front, your employer deducted about 2k from your pay, and gave it to the Revenue, to reflect wages paid. These wages are now no longer paid (the company has the money again). The employer should now try asking the Rev to give those 2k back. Then, your 2k + the Rev's 2k = the missing 4k, for which the company is then liable for corpo tax in the usual way...that's less than 50%, of course, so they'll be quids in.

But really - the company made a complete hames of this, and you're entitled, safer and simpler to just say 'I'd like to, but I won't'.

ainecaine

if your employer wants the 4000 gross paid back, you should only have to pay a net of 2000 to them, and when they gross it up it will equate to the full gross of 4000. The repayment should definitely go through payroll and you should get a final payslip showing your year to date includes the repayment and tax rebate, and should match exactly the amounts on your p45.
I work as a payroll manager, PM me if you want to get specific with numbers and I will explain it better.

RiseToMe

ainecaine wrote: »

if your employer wants the 4000 gross paid back, you should only have to pay a net of 2000 to them, and when they gross it up it will equate to the full gross of 4000. The repayment should definitely go through payroll and you should get a final payslip showing your year to date includes the repayment and tax rebate, and should match exactly the amounts on your p45.
I work as a payroll manager, PM me if you want to get specific with numbers and I will explain it better.

Really appreciate this, I'll drop you a pm tomorrow morning if you don't mind.

Mrs OBumble

RiseToMe wrote: »

He seems to think it they may have put me down as working 3 days when I was working only 2 but my payslips say 16 hours which is two days.

OP, I'm finding it hard to believe you are swallowing the complete and utter BS he is feeding you.

Forget the hourly rate (because, hell, both you and the employer have forgotten what was said).

How many days per week have you worked?

If it is two, ie 16 hours, like you said, then you have been correctly paid.

The only way that you could have been overpaid is if the hours were wrong.

For your employer to think you have been overpaid, and to have a number for the amount of the overpayment when he doesn't know your pay rate is .. umm ... indicative of some weird sort of problem. Maybe not quite fraud or money laundering, more likely that he's got a problem with his budget and sees you as a handy way of fixing it.

Now, if you value the relationship with him that highly, feel free to pay some money to him - the equivalent of 4k gross.

He will put this through is books as salary recovery. But you should not for one minute think you have been overpaid. In your eyes, all you are doing is buying a positive leaving relationship.

davo10

The fact that the overpayment is from January only would seem to be significant as presumably the op would have noticed his pay packet changing from what it was prior to that. There could be an explanation for the overpayment, if the op (or his accountant) allocated all tax credits to other source of income from the end of the last tax year, then beginning in January his net pay from this job would have gone down quite a bit because there would be no credits to offset against the tax payable. If the op did not inform this employer about the reallocation of tax credits, the employer would continue to pay the same net as if the tax credits were being applied and then get a big bill from Revenue when the op leaves.

Taken in isolation, because of low pay in this job, when tax credits were applied, the op would pay very little tax. But because tax credits were allocated to his other, much higher income, the op would be paying the full rate of tax of this income (which would indeed be around 33%), I suspect the employer was not informed that tax credits were allocated to other income and continued to pay op what was effectively the tax free net amount, now Revenue want the tax.

The reallocation of tax credits can be an issue when an employee marries and then allocates all credits to their spouse, if the employer doesn't spot this, the employee can continue to be paid the same net and then the employer gets hit with a whopping bill by Revenue and has to go to the employee for repayment of tax, not easy if the employee is leaving like the op.

Op, both you and your employer can get your agreed pay from your first payslip. He would have had to set this up with payroll/revenue in order to calculate your net pay so check the gross and divide it by the hours worked that month. If it was wrong from the start, then you accepting it for a year is beyond belief.

Op, if it is tax that is the issue, while your employer may arrange to deduct it and pay it on your behalf, it is in fact you who is liable for it so you need to ask him if this is what the overpayment relates to.

RiseToMe

davo10 wrote: »

The fact that the overpayment is from January only would seem to be significant as presumably the op would have noticed his pay packet changing from what it was prior to that. There could be an explanation for the overpayment, if the op (or his accountant) allocated all tax credits to other source of income from the end of the last tax year, then beginning in January his net pay from this job would have gone down quite a bit because there would be no credits to offset against the tax payable. If the op did not inform this employer about the reallocation of tax credits, the employer would continue to pay the same net as if the tax credits were being applied and then get a big bill from Revenue when the op leaves.

Taken in isolation, because of low pay in this job, when tax credits were applied, the op would pay very little tax. But because tax credits were allocated to his other, much higher income, the op would be paying the full rate of tax of this income (which would indeed be around 33%), I suspect the employer was not informed that tax credits were allocated to other income and continued to pay op what was effectively the tax free net amount, now Revenue want the tax.

The reallocation of tax credits can be an issue when an employee marries and then allocates all credits to their spouse, if the employer doesn't spot this, the employee can continue to be paid the same net and then the employer gets hit with a whopping bill by Revenue and has to go to the employee for repayment of tax, not easy if the employee is leaving like the op.

Op, both you and your employer can get your agreed pay from your first payslip. He would have had to set this up with payroll/revenue in order to calculate your net pay so check the gross and divide it by the hours worked that month. If it was wrong from the start, then you accepting it for a year is beyond belief.

Op, if it is tax that is the issue, while your employer may arrange to deduct it and pay it on your behalf, it is in fact you who is liable for it so you need to ask him if this is what the overpayment relates to.

I appreciate the reply and the time and consideration you gave to it, however it is not bin to with tax. I have been consistently paid 1500 a month for 2 days a week since December (not in Nov as I only started mid month). He seems to be of the opinion that the pay in December is correct (perhaps payment due to working bank holidays etc and I also took one unpaid day).

When I started there I had my full annual allocation of tax credits to use so in Nov and Dec did not pay tax, however my allocation was changed from January and has been correctly deducated by them every month in accordance to the salary I was being paid and the fact that I allocated zero credit to them. So its not a tax issue in the sense that you ask, it's a tax query for me as if I pay him back the gross overpayment u need to be able to get back the tax paid by me.



Edited to put emphasis on the fact that there was not an extra 500 in my pay from January that I didn't notice or ignored, I'm not that kind of person. In Nov I was paid around 1040(gross) , as I didn't start til the 2nd week if I recall so not a full month, in December I was paid roughly 1350 (gross) if I recall correctly but had taken a day unpaid leave for Christmas and then in January onward I did my full allocation of hours every month and was grossing 1500. So no, I didn't notice a surge in pay and choose to ignore it.

RiseToMe

Mrs OBumble wrote: »

OP, I'm finding it hard to believe you are swallowing the complete and utter BS he is feeding you.

Forget the hourly rate (because, hell, both you and the employer have forgotten what was said).

How many days per week have you worked?

If it is two, ie 16 hours, like you said, then you have been correctly paid.

The only way that you could have been overpaid is if the hours were wrong.

For your employer to think you have been overpaid, and to have a number for the amount of the overpayment when he doesn't know your pay rate is .. umm ... indicative of some weird sort of problem. Maybe not quite fraud or money laundering, more likely that he's got a problem with his budget and sees you as a handy way of fixing it.

Now, if you value the relationship with him that highly, feel free to pay some money to him - the equivalent of 4k gross.

He will put this through is books as salary recovery. But you should not for one minute think you have been overpaid. In your eyes, all you are doing is buying a positive leaving relationship.

I've worked 2 days a week every week from January.

Honestly, part of me feels it's his problem I have no contract so I have no hard facts other than his word of the over payment, however at the same time, morally I feel it's correct to come to a resolution with him. I just don't want to end up more out of pocket through it but I think I've gotten a good steer on how to make that work.

sondagefaux

Morally, the correct solution is to ask him for documented evidence that you've been overpaid, including a contract showing your agreed pay rate, timesheets and payslips showing how many hours you've worked and how much you've been paid.

Being a pushover for a potentially dodgy employer isn't a morally correct way of acting - you make it significantly harder for other employees to ensure that they are paid and treated properly if you concede to this demand. Every employee who doesn't stand up for themselves is also failing to stand up for other employees.

meme74

If you only work 2 days a week and have a 4 grand overpayment in 9 months then I struggle to see how you didnt notice yourself? Surely you had some idea what you were expecting to be paid? I know you say money wasn't a factor but you honestly dont have a clue how much was agreed??

xabi

So much conflicting info here, you need 2 people, your Accountant and a Solicitor.

sbsquarepants

RiseToMe wrote: »

I dont know if legally I can just walk away and not pay it back from googling a bit- not accurate I know but as I said, I am awaiting the legal position call which may take some time!

Of course you can - he thinks that maybe they should have been paying you x amount... what a pile of shíte. Tell him you got paid for the work you have done, he can have his money back when he finds a way to give you your time back, end of story.

endacl wrote: »

Tell him that, according to your records, you were underpaid. Make up any old figure you like.

Excellent advice.

Don't hand over 4grand, or 2 grand or 2 cent for that matter because of bullshít like this.

sbsquarepants

xabi wrote: »

So much conflicting info here, you need 2 people, your Accountant and a Solicitor.

You don't need either of these people - your employer does.
Just politely tell him no and move on.

xabi

sbsquarepants wrote: »

You don't need either of these people - your employer does.
Just politely tell him no and move on.

No, he definitely does.