Written by Katharine Evans, Internships and Vacancies Officer at UCL Careers.
First off, don’t panic. If you are not a freelancer, you are likely to be legally entitled to receive a payslip – https://www.gov.uk/payslips. This will help you to see what is going on – it may be available through an online portal, through email, handed to you by your employer, or posted to your home. Payslips must be provided on or before payday.
Take a look at the amount that was deposited by your employer into your account, rather than your total account balance. Compare this deposit amount against your payslip.
Payslips must show:
- Earnings before and after any deductions
- Total amount of any deductions that you’ve paid, including:
- National Insurance
- Income Tax
- Pension Contributions
- Student loans (if you meet certain criteria)
- If you get paid per hour, your payslip has to show how many hours you’ve worked.
Have a look at all the information provided on your payslip, this will help you see how your pay is worked out. The first things to look at when checking you’ve been paid correctly are:
- Total earnings before deductions – if this matches what you expected it’s likely that you didn’t account for a standard deduction, and your employer has paid you the right rate for the correct amount of hours. It’s worth checking where the deduction came from so you know if it’s a one off, or if this is the standard.
- Tax rates – have you paid more tax than you were expecting?
- Hours worked—have you been paid for the number of hours you actually worked?
- Pay rate – Were these hours paid at the correct rate?
- Additional pay—If you were expecting overtime, commission or bonuses were these paid? Are you sure they were due in this pay cycle?
- Holiday pay – were you paid for the annual leave you took? Did you have enough annual leave allowance?
- Sick pay—If you were off sick this may mean reduced pay
- Deductions – your employer should clearly state any deductions made, were these lawful deductions?
- Student Loans– You may have earnt over the threshold for repayment meaning that this has been lawfully deducted from your salary, or if you graduated last year you might now be eligible to pay. Student loan repayments begin on the 6th of April the year after you graduate/leave your course.
How to sort out the issue
If the reason you’ve been underpaid is due to something controlled by your employer it’s worth starting to sort this out by talking to them. Things that can be resolved by your employer include: Hours worked; pay rate; holiday pay; bonuses, overtime, and commission; and sick pay. It is helpful if you work out how much you were expecting and where the discrepancy lies to make resolution easier. If the mistake was made by your employer then you can ask to be paid the additional amount before the next payday. You should not need to wait.
If the mistake was on your side then you may have to wait until the next payday, however in most cases you will need to be paid correctly. If you input your hours incorrectly then your employer must pay you for the time worked, as stipulated in your contract.
If this is your final paycheque from an employer you may find that there are some deductions compared to your normal pay. A common reason for this is that you’ve used more holiday that you’ve accrued. The additional annual leave will be recouped from your final cheque. As long as you’ve received the correct amount as detailed in your contract then this is standard practice.
If you don’t feel comfortable talking to your employer alone or you work in a larger organisation and don’t know where to direct your query then it might be a good idea to see whether you have an employee representative to help you approach your employer. If you are a member of a trade union then you can get in contactor if you’re a member of a trade union, then a union rep.
If your employer doesn’t resolve this issue, and you feel that you have been underpaid, and are entitled to some/all of the missing pay there are a range of next steps. You should start by seeking advice from your local CAB, trade union, law centre or the Advisory, Conciliation and Arbitration Service (known as ACAS) – https://www.acas.org.uk/. ACAS provide advice and arrange settlements between employers and workers.
If your underpayment has been caused by paying too much tax this can be easily resolved. You should have provided your new employer with your P45 from your old role when starting this should have informed them of your tax code, which would have been passed on to HMRC so you could be taxed accordingly. If you’ve just started a new job and not worked before or did not supply a P45, you might pay tax through an emergency tax code. This could mean you get less money than you should until HM Revenue and Customs updates its records. Normally this will only be for a month or two at the most. If you’ve been in your job for more than 3 months and think your employer has taken too much money for tax, you’ll need to check your tax code and let HMRC know if it’s wrong. Your pay will be adjusted so you pay the right amount of tax over the tax year.
If you worked during the holidays, or in a short term role, and were taxed as your income met the personal allowance threshold – https://www.gov.uk/income-tax-rates, but are now not working, or are earning below the tax threshold, then you can receive a rebate. This typically occurs after the beginning of the tax year, with most refunds being issued through your company’s payroll (PAYE) or direct from HMRC around June. See https://www.litrg.org.uk/tax-guides/tax-basics/how-do-i-claim-tax-back/how-do-i-claim-back-tax-i-have-overpaid-through-paye#toc-how-do-i-claim-a-refund-for-the-current-tax-year-if-i-don-t-want-to-wait-for-a-p800-The quickest way to address this is through phoning HMRC rather than going through your employer.