What to Do If You're Overpaid at Work
Last updated: 3 August 2025
Step 1: Check Your Payslip Carefully
Review your payslip against your expected hours, salary, and any bonuses. Make sure the extra amount wasn’t due to legitimate reasons like back pay, a bonus, or a reimbursement. If the overpayment is genuine, move on to the next step.
Step 2: Notify Your Employer Promptly
Inform your HR or payroll department as soon as you notice the error. This shows honesty and can help avoid misunderstandings or accusations of dishonesty.
Step 3: Understand Your Employer’s Rights
Under the Employment Rights Act 1996, employers in the UK can legally reclaim accidental overpayments, even without your consent. However, they must do so fairly and within a reasonable time frame.
- They may deduct it from future pay (typically in instalments)
- You may be asked to repay it directly
- It should not reduce your take-home pay below minimum wage
Step 4: Agree on a Repayment Plan
You can negotiate how and when the overpayment will be repaid. Most employers are willing to agree on a repayment schedule that won't cause financial hardship. Get the agreement in writing to avoid future disputes.
Step 5: Seek Advice if You’re in Dispute
If you disagree with your employer’s claim or feel the repayment terms are unfair, contact ACAS (Advisory, Conciliation and Arbitration Service) or a union representative. You may also seek legal advice if the situation escalates.
Can You Ever Keep the Money?
In rare cases, if you can prove you spent the money in good faith and that repaying it would cause undue hardship, you may have a case. However, the burden of proof is high, and this is very uncommon. Always assume the money will need to be returned.