How to deal with a salary overpayment or deduction

When you’re on long-term leave and your pay should have been reduced, but wasn't, your employer may accidentally overpay you.

When this happens, and they discover their mistake, your employer has the right to deduct the 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. Do this as early as possible, and in writing, by sending them a letter or an email.

Check your contract. See if your employer has a written policy for what to do when they overpay you.

Speak to your HR department. Ask them how they plan to deal with this and see 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. You can get this from ACAS or your union rep.

Get in touch with us. 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 now.