Anna asks: “Today I checked my payslips and noticed a big difference from my previous payslips. My new salary is 52k and September’s payslip shows £4,333.33pm. However, my old salary was 48k and payslip showed £3138.56 instead of £4000. What should I do?”

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Question 25 – What Do I Do If I’ve Been Underpaid? – Shownotes

Today’s question comes from Anna:

Today I went through my payslip after a small pay rise for September. I noticed a big difference from my previous pay slip and September.

My new salary is 52k and September’s payslip shows £4,333.33 = £52k. However, my old salary was 48k and gross monthly pay (before tax) for my first 12 months was £3138.56 instead of £4000.

So my employer had me on an incorrect salary for 12 months. I’m an idiot for not checking this before. Obviously I will bring this up with HR first thing tomorrow, but do you know how I would be paid back? And how it would be calculated?

Thanks for your question Anna.

 

 

Keep A Budget And Check It!

First of all, this question highlights to us all the importance of checking your income and expenses each month through keeping a detailed budget. This way, you would have caught this issue much sooner.

That said, it’s good that you’ve noticed it now. As you’ve said in your question, your first point of contact is to speak to a senior member of the HR team as this is a fairly serious issue.

Fortunately, because this doesn’t change your tax bands, they can simply pay you the whole amount in the current month and the tax and national insurance will still be accurate. This seems like the most likely way that this will be resolved. You should expect your employer to correct this as quickly as they can, which will most likely be in October’s payslip.

Additionally, if you make a contribution to your pension which your employer matches, this should also be straight forward as on your current salary you won’t be hitting the pension limits and so the percentage taken this month will be the same as if the percentage had been taken every month for the past twelve months.

This is all straight-forward as long as your company pays you what they owe. You can claim for unpaid amounts under contract law up to 6 years after the mis-payment and hence there is no reason why they wouldn’t pay you next month for their mistake.

If they do, discuss the situation (together with your contract) with the HR manager or director at your firm and, if they still refuse to pay, then you will have to explore consulting a lawyer and go to county court or an employment tribunal to reclaim what you are contractually owed.

 

 

Don’t Waste This Surprise Windfall

From a financial standpoint, this means that October’s gross salary will be over £10,000 more than August’s was. As such, it’s a good idea to know what you are going to do with this windfall and make sure you don’t spend it too freely given that you may see it as “free money” because a month ago you weren’t expecting it.

So, to conclude, hopefully you won’t face any problems with your HR department in your company Anna, and the most likely outcome is that they will realise their error and make the payment up next month.

Once you have agreed the payment from HR, make a plan for that money (where you are going to save or invest it) and build that into your budget. Remember, every month, every penny needs a purpose. And that is truer than ever when they are unexpected pennies.

 

 

Ask Your Question

This show runs three times a week and answers all of your personal finance questions. If you have any questions, please don’t be shy to ask. You can ask in three ways:

1. Leave a comment on any of the Q&A podcast shownotes (including this one)
2. Email me at moneystepper@gmail.com
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