An employee can be overpaid through payroll by paying a bonus that hasn’t been awarded, or paying too much overtime or commission. Employers are legally entitled to recover an overpayment by deducting it from future wages, after discussion with the employee. However if the overpayment has been made over a number of pay periods and is a significant amount, the overpayment should be highlighted to the employee as soon as it is discovered.
Where deduction of the amount from one pay period would result in financial hardship for the employee, a schedule of deduction and repayment to return the salary overpaid should be agreed between employer and employee.
Further information around deductions from wages can be found on the ACAS site here:
http://www.acas.org.uk/index.aspx?articleid=4125
PayrollAbility internal processes and checks ensure that ad-hoc overpayments are avoided, as we get to know your business and payroll. We will always ask questions if things are ‘out of the ordinary’ for your payroll, minimising the risk of overpayment issues. Speak to us today about outsourcing your payroll, giving you more time to run your business without having to worry about paying your employees.
