How to deal with a salary overpayment or deduction

Sometimes, when you’re on long-term leave and your pay was supposed to have been reduced, your employer may accidentally overpay you.

When this happens, and they discover their mistake, they have the right to deduct this overpayment from your salary. This could leave you with a big shortfall in your monthly income, so it’s important you know how to deal with it. 

Legislation doesn’t say how much time your employer has to take back overpayments. You may be able to negotiate that this takes place over a few months, rather than from one pay packet. But your contract or your employer’s policy may say that any overpayment should be taken from a single month's salary, so it’s important you check this.

How to deal with a salary overpayment

If it you notice an overpayment: 

  • Tell your HR department as early as possible, and in writing, by sending them a letter or an email. 
  • Check your contract to see if your employer has a written policy for what to do when they overpay you. 
  • Speak to your HR department about how they plan to deal with this. Ask them if they can space out the deductions over a number of months.

Tip: If you notice you’ve been overpaid, tell your HR department in writing as soon as you can. 

How to deal with a salary deduction

If you’ve had money deducted from your salary, but your employer didn’t tell you about this in advance, get advice on what you should do:

  • Get independent advice from ACAS or your union rep. 
  • In some cases, we may be able to refer you to our charity partner Law Express.

If you’ve had a deduction from your salary and you’re at risk of losing your home, or you can’t pay for essentials, in some cases we may be able to help. Get in touch today.