# Paid double at work by mistake, how will this be calculated on my tax return?



## milk (Jan 6, 2015)

I was paid for a 4-week period when I should have been paid for a two week period. My employer is telling me they are simply going to retract it from my next pay check. However this means I will have paid taxes three times, but only will have received pay twice. (They paid me twice on this pay check, so I paid a tonne of tax, and next pay check they will pay me again, but retract what I "owe" them, which is a full paychecks worth). They have done this before, and I felt screwed over, but was new so had a hard time doing anything about it. So I just want to confirm that the money that I am being taxed will not come back to me, as well, this money will probably be taxed at a higher percentage as I will be over the initial %15 for income tax. 

If this does not make sense let me know. I just want to confirm that I am being fleeced. They messed up, I was honest enough to report that I was paid twice, and now if they get their way, I will be losing hundreds of dollars on tax that I wont be able to get back. Is that how it will work? Strictly speaking about taxes? Thanks!


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## lonewolf (Jun 12, 2012)

Don't worry to much about having paid to much in taxes, if you paid to much you will get it back @ the end of the year. You make x amount of money in a year you pay x amount of taxes regardless of how big some pay checks were to others. You might lose some money because your not making interest on the money but then again it might be a blessing you might spend a little less or lose less money if you would have invested the money & the market went against you


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## PrairieGal (Apr 2, 2011)

If they do it correctly, they will just deduct what you were paid as an advance, and the taxes will work out the same.


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## Eclectic12 (Oct 20, 2010)

milk said:


> I was paid for a 4-week period when I should have been paid for a two week period.
> 
> My employer is telling me they are simply going to retract it from my next pay check.
> However this means I will have paid taxes three times, but only will have received pay twice.


Odd ... I would have thought they'd issue a pay stub showing that nothing was paid with a note saying it was already paid.
If the second pay is for the same amount - I'm not sure what they could be retracting on a second pay cheque above skipping "income, taxes withheld" etc.

I'm also not sure about the "paid taxes three times" as there would have to be a third pay on the second pay cheque, with nothing retracted. If they've retract pay on the second cheque, they should also have retracted the income tax at the same time ... making it more along the lines of "paid twice then paid for only overtime/special extra income".

I'm not a payroll expert though ... and clearly if the double pay/retract is happening multiple times, the company has issues in their payroll dept.




milk said:


> I just want to confirm that I am being fleeced. They messed up, I was honest enough to report that I was paid twice, and now if they get their way, I will be losing hundreds of dollars on tax that I wont be able to get back.
> 
> Is that how it will work? Strictly speaking about taxes? ...


Not unless there is another error where they incorrectly report some combination of earnings/taxes withheld ... regardless of how it was paid/retracted over the course of the year, when you file your tax return in early next year - should there be any final overpayment of income tax, CRA will refund it.

One way you are being messed up is that this will be extra bookkeeping/reconciling to make sure they didn't mess up the T4 numbers versus the pay cheque to pay cheque numbers. 

The second is that because the "double pay cheque" is for twice the amount, the payroll software *might* have automatically bumped the taxes withheld into a higher tax bracket. Depending on what happens with the "retraction on the next cheque" (which I'm not clear on), it might be for the single pay cheque amount so that over the year, you end up with some cheques having a small over-payment of the income tax. As I say, as long as the T4 numbers are correct - should an overpayment exist, CRA will refund it.


If it was me, I'd start a spreadsheet that is documenting pay, income tax withheld etc. for each pay cheque with a running total. I'd also carefully go through the "double pay then retract" stubs carefully to make sure that the retraction (whatever it is) is done the same way each time. Understanding what is being done will help make sure nothing falls through the cracks.

The key is you want to be sure that regardless of what was done ... the final totals on your T4 are correct as this is what will be used on your tax return. If the T4 is correct and there has been too much income tax withheld - the tax return will end up giving a refund. Your risk is that bad T4 numbers mean you will depending on CRA's computers to flag any inconsistencies, which likely will further delay the refund should there be an overpayment of income tax. 


Cheers


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## milk (Jan 6, 2015)

*road less travelled*

Thank you all for the answers. Its been extremely frustrating dealing with a large centralized HR department in Ottawa. They have been telling me what some of you have said, but I am leery of believing anything they say any more when they cannot even get my pay correct (7th incorrect pay in my first year with them!). I put forward the idea that they simply not pay me this pay period, but this idea is totally beyond them for some reason... Instead they prefer to pay me and then retract it... 

Could anyone tell me as well, is the tax they take off your pay check a standard amount, say a straight 20% or something. Or does it vary depending on your wage? I believe they take off off the max allowable for me. I know the year end totals are based on brackets, but just wondering for each and separate cheque I receive. Thanks again, I appreciate the help.


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## P_I (Dec 2, 2011)

milk said:


> Could anyone tell me as well, is the tax they take off your pay check a standard amount, say a straight 20% or something. Or does it vary depending on your wage? I believe they take off off the max allowable for me. I know the year end totals are based on brackets, but just wondering for each and separate cheque I receive. Thanks again, I appreciate the help.


It is dependent on wage, plus a host of other factors such as TD1 form claims. CRA has a neat tool that you might find helpful, check out Welcome to the Payroll Deductions Online Calculator (PDOC)


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## none (Jan 15, 2013)

Really it's nothing to worry about. Yeah, it kind of sucks that you may end up giving the government a small loan for a few months but isn't it the least you can do? Remember, it's not what your country can do for you but what you can do for you country (thanks John!).


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## Confused (Jan 17, 2015)

milk said:


> I was paid for a 4-week period when I should have been paid for a two week period. My employer is telling me they are simply going to retract it from my next pay check. However this means I will have paid taxes three times, but only will have received pay twice. (They paid me twice on this pay check, so I paid a tonne of tax, and next pay check they will pay me again, but retract what I "owe" them, which is a full paychecks worth). They have done this before, and I felt screwed over, but was new so had a hard time doing anything about it. So I just want to confirm that the money that I am being taxed will not come back to me, as well, this money will probably be taxed at a higher percentage as I will be over the initial %15 for income tax.
> 
> If this does not make sense let me know. I just want to confirm that I am being fleeced. They messed up, I was honest enough to report that I was paid twice, and now if they get their way, I will be losing hundreds of dollars on tax that I wont be able to get back. Is that how it will work? Strictly speaking about taxes? Thanks!


First, did you cash the check? If it happens again don't cash it. Make them correct it immediately. It's easy to reverse a payroll check.

If you cashed it. Your employer MUST still do a reversal.

Then re-issue the normal 2 week check with the normal deductions and enter the difference between what they paid you and what they should have paid you as an advance. 

There are no withholding taxes on advances.

So your deductions would change to what you normally have on a 2 week check.

Then, when they do your next pay, they deduct the advance and put in the deductions. As rates have dropped you should get a teeny pay check.

Your employer MUST do a payroll remittance adjustment with the CRA. This insures that your T4 and the CRA's T4 summary would be correct for the year.
They can do this in My Business account on the CRA website. http://www.cra-arc.gc.ca/bsnsss/menu-eng.html

In most cases with this sort of error, the payroll person who made the error is not sure how or doesn't want to do the added work to correct it.

It's not deliberate, just incompetence.

Often an employer is not really conversant with how payroll works and the payroll person tells them, 
"This is all I can do to fix it". If the employer himself is doing payroll maybe he/she doesn't know how or doesn't want the work, either.

Go to your employer AND the payroll person. They are required to do this adjustment. 

The CRA staff is used to these kind of errors and are very pleasant about fixing them.
If you get no satisfaction, contact the CRA at 1-800-959-8381 for personal and 1-800-959-5525 for business.
Service Canada is also a good bet.

Print 2 copies of this and take a copy to your employer and payroll person they can't say they didn't know. Take your copy, too, and have them both sign and date it.


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## Confused (Jan 17, 2015)

Hi, me again. Maybe it would be a good idea to cut off the printed part of these that contain the fleecing reference. LOL

Also DO WORRY ABOUT IT. If they don't correct and do the payroll remittance adjustment your T4 will show your total income as higher and YOU WILL pay more taxes, CPP and E.I.

The jump from 15% to 22% in the next bracket is very significant and you'd end up owing quite a bit of money because you've been deducted in the 15% bracket all year.

The CRA only knows the amounts submitted with the T4's.


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## Confused (Jan 17, 2015)

Also, the main office is probably not where the error occurred but at your payroll person's desk. She/he submits the hours/dates worked and could be making the errors.

DON"T LET THIS GO!!!!!!!! T4 Summaries have to be completed by the employer by Feb 28 and submitted to the CRA.


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## MasterCard (Aug 2, 2013)

All balances out at the end of the year when you pay taxes, as you list your annual income, taxes paid, etc.


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