Payroll errors aren’t uncommon – but don’t usually result in a worker being overpaid by 100 times what they were meant to.

The BBC reported this month how one Australian governmental employee was meant to receive £2,803.79, but instead found £280,250 in their bank account.

The honest worker was based in a remote area of the Northern Territory, returned the overpaid money four weeks later – but would have done it sooner if they did not have to travel to reach a bank.

A report into the incident blamed two human errors – the incorrect data entry in the first place and then the failure to deal with a system-generated alert which would have highlighted the error.

Have you overpaid an employee?

No matter how careful you are, mistakes happen. If you realise you’ve made an error when paying someone, it’s not too late to fix it. You are entitled to reclaim the overpayment but Acas suggests that you don’t simply start clawing back the money from the employee’s salary straight away.

Instead, you should speak to the employee to work out how to move forward together. You should explain how the mistake happened and clearly show how much was overpaid and agree on a repayment schedule. If you catch it soon enough, the employee may be able to pay you back quickly – but if it was longer, then you may need to give your employee time to return the money.

What if the employee has left the company?

If the person who received the windfall has left your employment, it becomes much trickier to reclaim the money you overpaid. If the final salary payment has been made, you can request repayment. If they refuse, court action can be considered – but success will depend on the financial circumstances of the former employee. Court and legal fees may cost more than the sum in question.

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