Wages issue

Paddy_Green8

Hi all....looking for some help please.

I was overpaid wages of @€;4k for 6 months Dec 19 - May 20 which I was taxed on.

I brought the issue to their attention and was given a couple of options about how to repay the net amount.

I made a couple of repayments but still have a lump sum of €2k outstanding

I am finishing up this month and am owed a fair bit of money in holiday and overtime pay.

I offered to clear the lump sum today by bank transfer but payroll have informed me that they plan to pay me back the €2k I've paid back net and offset the whole amount of €4k owed against my holiday pay and overtime.

I dont think this is fair as I've already paid tax on the €4k and now they effectively taxing me again my withholding my holiday pay and overtime gross amount.

Does this sound right to people and is there anything I can do to stop payroll processing it like this.

Thanks

Paddy

thefa

Hi Paddy,

If I’m picking up what you’re saying right, you were overpaid into your account (net) €4K and you’ve paid back €2K of it so far but since you are finishing up, they are planing on return the €2K and using the €4K net as an offset against your holiday and OT owed.

So you would want to check out that your 1) net pay and 2) tax is correct by the time you leave.

1) Do you know how much holidays and OT (gross) you are owed? If so, it would be worth working out the net pay and comparing this to the €4K. I might be oversimplifying it but if I was in any doubt, I would be reaching out and asking them to clarify how they are working out the figures.

2) it’s not clear whether they ever fixed the overpayments from a tax perspective - could be able to check the year to date balance on a recent payslip to check this or query it to be sure. Maybe they are going to use the finishing up to balance the overpayment against what the balances you have built to bring this in line. Worth checking as may save some time and some money down the line.

Paddy_Green8

Hi thefa

I'm talking in round sum amounts but roughly my overtime and holidays would be around €8k.

In relation to point 1 I don't think they're trying to pull a fast one on the gross to net.

My preference would be to repay the €2k net I owe them and for them to pay me my monthly wages, overtime and holidays.

By my very rough calculations I work out that my take home pay will be greater if they do it that way rather than the offset method.

I know ill pay a rake loads of tax this month but that doesn't bother me as I was on the Covid scheme earlier in the year so I'm expecting a tax bill come the end of the year. I'm hoping my tax can be used to pay any liability owed end of 2020.

In respect of point 2 no they never sorted the tax on any of my old payslips.

thefa

So you were overpaid €4K net in Dec19-May20. If your marginal rate of tax is 52%, then €8K of holiday/OT would see you getting be in the region of €4K also so this could be where the offset idea is coming from.

Paddy_Green8

Yes thats it but I had already paid them back €2k net and was going to transfer the balance before my final pay.

I get the idea of the offset but I was hoping that I'd get paid higher amount and taxed more in my final payslip.

The more tax I pay now could be used to offset against any tax liability for the Covid payments i received earlier in year.

Maybe I'm just over complicating things... just seems like they're taking easy way out by not fixing the older overpayments on the tax returns and getting the net refund from me and tax refund from revenue

silver2020

I'm thinking they are going to be saving you money or at least leave you no worse off.

Payroll departments tend to talk pre-tax figures. Possibly its lost in translation, but looks like the will recalculate your complete earnings for this year and combine the gross overpayment and give you a net figure.

I would suspect that it is difficult to put a net refund back into the accounts, so this is an opportunity for them to do it in a clearer way.


So they will repay you the amount you refunded them (they should have a agreed a month salary gross reduction instead) and you'be back a square one.

Say the gross overpayment was €7,000 and your last pay period you are owed €12,000, they will (should) simply deduct 7,000 from the 12,000 and apply the €5,000 balance as your final pre-tax amount.

Far easier for both you and them in terms of accounting for tax.

thefa

Just to add to silver’s response, I don’t believe the way you suggest paying the extra tax now would work out how you are picturing it when it comes to your year end tax liability, or at least without a lot of heartache when it comes to sorting it at that point.

Revenue will have the records of what went through payroll and not any bank transfers you made back to the company so if your overpayment is not corrected, it will appear that you owe that tax on top of the Covid adjustments. Open to correction but that would be my understanding.