HR/Payroll/Tax Question

lolakimono · ‎03-29-2012

A co-worker did some summer "contract" work. Depending on the department, sometimes they submit payroll quickly and sometimes they don't. (I am still awaiting pay from work done July 7). ${#emotions_dlg.rolleyes}$

It appears on our paychecks as "special" pay, but it's calculated into one check- our salary and special pay. During the last pay period, he had earned approximately $1,900 for summer "special" pay. Today we got our direct deposit voucher for Wednesday's pay), and this pay period's check had a strange amount. When he called HR/Payroll to inquire about the amount, they looked up the account and realized that he was paid the wrong amount.

Now they are telling him that although he netted about $1,000 (once the taxes, insurance, union fees, and retirement were deducted) he has to REPAY the $1,900 amount and wait until he files his tax return to get the money back.

Is this correct? ${#emotions_dlg.confused1}$

I'm surprised they didn't just adjust future pay (special and salary pay) to correct their mistake. ${#emotions_dlg.unsure}$

Bird mama · ‎03-12-2010

I don't get why he has to pay $1900 - they took deductions from it already didn't they?

There are times when you must speak, not because you are going to change the opposing side, but because if you do not speak, they have changed you.

occasionalrain · ‎03-10-2010

I don't think so; their mistake should be their problem to fix. I've had mistakes and they've been corrected on the next payroll.

lolakimono · ‎03-29-2012

On 8/18/2014 Bird mama said:
I don't get why he has to pay $1900 - they took deductions from it already didn't they?

They explained it to him that it affected the total earnings for the year, so it would cause a problem at tax time.

Summer pay is more complex because we are paid out of a reserve, and 22 of the 26 pays have certain deductions.

Then, to further complicate things, we have a new salary step scale being implemented, but they're rolling it out on different dates. ${#emotions_dlg.unsure}$

I told him to contact the union. It sounds like someone is trying to C.Y.A. and doesn't want to create further problems.

They also gave him the option of paying it all in September (when the pay raise kicks in), paying over installments before the end of the tax year, or month payments. ${#emotions_dlg.confused1}$

Bird mama · ‎03-12-2010

Yeah, sounds like they are making it harder than it has to be. Your payroll process is squirrely enough to make me have an accountant on retainer ${#emotions_dlg.unsure}$ .

There are times when you must speak, not because you are going to change the opposing side, but because if you do not speak, they have changed you.

Peaches McPhee · ‎04-19-2010

He earned $1900 and netted $1000. If he repays the $1900, that has nothing to do with taxes. $1900 is pay, not taxes. Doing his taxes will not recoup pay.

Unless I am misunderstanding this.

-- pro-aging --

Rochester, New York

KYToby · ‎02-19-2012

If I understand this correctly, this sounds appropriate. He was overpaid, and he has to return the excess pay to the company. He has multiple options for repaying this, and it is only fair that he pay that part back.

As a result of the overpayment, various taxes were taken out based on this amount. When he files his taxes, he will get the overpaid taxes back. It would seem to me, though, that payroll could make manual adjustments to his future taxes to compensate, but I am not familiar with most tax regulations.