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Our Overpayment Notification Letter Template addresses overpayment errors promptly, ensuring clear communication and resolution for all parties involved.
[Sender name]
[Sender address]
[date]
[Recipient name]
[Recipient address]
Dear [Recipient first name],
Overpayment of salary
I am writing to inform you that, due to an administrative error, you have been overpaid in the sum of £[amount] per [week/month] for the last [number] [weeks/months].
The total overpayment is therefore £[amount].
In accordance with section 14(1) of the Employment Rights Act 1996, the Company now wishes to recover from you the sum that you have been overpaid by deducting the overpayment from your wages. However, at the same time, the Company does not wish to cause you any financial hardship. Consequently, we would
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A salary overpayment letter informs employees of excess payment and repayment terms. It may suggest repayment methods and highlight legal obligations. Prompt and fair handling of overpayments helps prevent legal or financial issues, promoting employee understanding and corrective action.
As soon as an overpayment is identified, you should take action as possible. This would involve raising the issue with the employee to explain how you intend to recover the money, usually by deducting from the employee's future salary payments until the amount is paid off.
Related HR resources and workflow
Explore the HR resources that may be relevant before and / or after using the Overpayment notification letter, helping you understand the wider process, maintain appropriate documentation and follow a consistent approach.
Our pay or salary payment arrangements policy template provides information regarding pay or salary payment arrangements.
Use these best practice actions, recommended timescales and process stages to understand when and how the Overpayment notification letter should be used, helping ensure each step is handled consistently and appropriately documented.
Under the Employment Rights Act 1996, employers must ensure that any deductions made from an employee's pay are lawful and do not take the employee's pay below the national minimum wage.
Employers must follow the principles of natural justice and fairness when dealing with overpayments. This means giving the employee an opportunity to respond and challenge the overpayment before any deductions are made.
The letter should include clear and concise information about the amount of the overpayment, the reason for the overpayment, and how the employee can repay the amount.
Employers should be aware that some employees may have the right to set off the overpayment against any money owed to them by the employer. This should be taken into account when calculating any deductions.
If the overpayment is due to an error made by the employer, the employer should consider waiving the overpayment if it would cause financial hardship to the employee. However, if the overpayment is significant, the employer may need to recover the overpayment to avoid a loss to the business.
Employers must keep accurate records of any deductions made from an employee's pay and provide a payslip that clearly shows the amount of any deductions.
Yes. This template has been designed for organisations of all sizes, including small businesses, charities and growing employers. It follows UK employment law best practice and can be adapted to suit your organisation.
Our templates are developed with UK employment legislation, Acas guidance and HR best practice in mind and are reviewed and updated as relevant requirements change. However, every employment situation is different, so the template should be adapted to the circumstances and checked against the employee's contract and your organisation's procedures before use.
Yes, we highlight the areas of the document that you need to update with your own details, and where you need to make decisions to suit your situation. This saves you time and ensures that you meet best practice.
Yes. Once purchased, you'll be able to download it instantly. Templates are provided in editable format (such as .doc or .xls) so you can customise them easily, and in PDF format for easy sharing.
If you're looking for broader support, we also offer toolkits and library bundles that include the Overpayment notification letter template, along with other HR templates and policies for fully managing your situation. These may be more cost-effective if you need deeper advice.
AI can produce a document quickly, but effective HR documentation needs to be more than well-written words. It needs to reflect relevant UK employment law, HR best practice, practical considerations and the circumstances in which it will be used. These resources have been professionally developed around that wider HR context, drawing on extensive practical experience, rather than simply generating a generic document from a prompt.
Darryl Horn, Chartered HR Director
Darryl is a Chartered HR professional with over 25 years' experience in senior HR and employee relations roles.
He has extensive practical experience of managing pay and benefits processes and founded hrdocbox to provide businesses with practical, professionally developed HR resources grounded in UK employment law and best practice.
"Darryl provides support and advice with excellent judgement, and has a strong understanding of people, policies and UK employment legislation."
"He is someone I trust; consistent, dependable, and committed to doing things properly."
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