Wage Overpayment

jeffman01 · PayPerShop Newbie Joined: 16 Sep 2008 Posts: 1

I was overpaid with a payroll check in the amount of 1,886.41 before taxes with a take home amount of 1,524.99. My usual amount is 838.77 before taxes with a take home of 734.42. I was only owed three days pay out of a eight day bi - monthly paycheck. I reported the overage and have been told that they would take the money owed out of future checks. I told them I'd prefer to give them the money back minus the three days pay owed to me. Payroll feels this will cause me w-2 problems later. They are also giving me a figure owed back to them that is higher than the take home portion of the check! I need advice on what I should do. Would it not make more sense to give back the entire check and have them issue me a new check for the three days owed? Also should I get any agreement in writing? Am I correct that the tax portion on the overpayment is going to cause me to have a higher gross income than it should be? Help please!!

Ian Congreave · Posted: Wed Sep 17, 2008 7:34 am Post subject: Wage overpyament - US

Welcome to the PayPerShop forum and thank you for your question.

I am not an expert by any means on US payroll matters, but the W-2 issued by your employer at the tax year end is the same in principle as the annual summary issued by employers in the UK. It shows your gross pay for Medicare purposes and, if there have been any permitted pre-tax deductions, a lower gross pay for federal taxes and state taxes.

I presume, from your description of the procedures your payroll department intends to follow, that they intend to recover the overpayment by reducing your gross pay figure, which is the starting point for the W-2 statement. That should have the effect of correcting the net overpayment. You can perhaps check with them that that is how it will work. They may be willing to write down for you the effect of the procedure, showing you how your W-2 figures for the tax year to date including the overpayment compare with those after the recovery, in order to give you the confidence that the adjustments are correct.

Perhaps a visitor with direct US payroll experience could add to these comments?
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