A payroll discrepancy is a signal to investigate, not an instruction to rerun everything. The employee may have received the wrong amount, the payroll calculation may be wrong, the report to HMRC may be wrong, or a payment may have gone to the wrong account. Those problems can exist separately and need different corrections.
In this article
- Identify the affected employee and period
- Check the cause and correct figures
- Confirm how the correction must be made
- Explain and record the corrected payment
Correcting payroll errors starts with a precise description: what should have happened, what actually happened, which employee or period is affected and which records support that conclusion. Protect the existing evidence before making changes, particularly if a pay run has already been reported.
Find the layer where the error occurred
Compare the approved input, payroll output, bank payment and submitted report. An omitted timesheet is an input problem. A correct payslip with the wrong bank payment is a payment problem. A correct calculation sent twice may be a reporting problem.
| Symptom | First comparison | Likely next question |
|---|---|---|
| Employee reports missing overtime | Approved hours against pay items | Was the input omitted or the rate wrong? |
| Net payment differs from payslip | Bank record against approved net pay | Was the wrong file or amount released? |
| HMRC balance looks too high | FPS/EPS and payment records against account | Is there a reporting, allocation or timing issue? |
| Duplicate employee appears | Payroll identifiers and starter/leaver history | Did a record change create duplication? |
| Unexpected deduction | Current notices and payroll settings | Is the code, category or loan instruction correct? |
Keep a dated issue log. Record the tax year, affected pay date, original figures, expected figures, evidence, reviewer and planned action. That log gives the payroll operator enough information to investigate and helps prevent an unresolved problem being forgotten between pay runs.
Do not confuse a bank correction with a payroll correction
If an employee was underpaid, changing an accounting journal does not deliver their money. Equally, sending a bank transfer does not necessarily correct the payroll report. Coordinate both actions and confirm the required submission.
HMRC’s pay and deduction correction guidance explains procedures for incorrect pay and deductions, including an additional FPS when paying an underpaid employee. National Insurance and student loan recovery rules have specific limits and distinctions. Do not assume an employer can deduct every historical shortfall from the next payslip in one go.
Explain the issue to the employee promptly, including the proposed payment timing or correction and whom they can contact. For an overpayment, obtain advice about the lawful and appropriate recovery arrangement where needed. Keep the payroll calculation separate from any unresolved employment dispute.
Use the right reporting route
HMRC’s correction procedure depends on the field and tax year. Its FPS and EPS correction guidance covers pay and deductions, payment dates, employee information, National Insurance categories and other cases. Some errors require amended year-to-date figures; others require a different action. Do not resend an unchanged original report because it looks quicker.
Have the payroll operator establish the correction route before touching the data. Provide the submission acknowledgements and the software version or system being used. If the system cannot perform the required correction, involve the software provider or HMRC rather than improvising a workaround.
A mistake around a leaving date deserves particular attention. An internal correction and another reported departure are not interchangeable. Payroll identifiers also matter: creating a fresh employee record can compound the original problem.
Investigate an unexpected HMRC balance
A balance in the online account should be reconciled with reported liabilities and payments. Check that reports were accepted, the relevant account has had time to update, payment references were correct and payments relate to the intended period.
HMRC recommends checking reporting details, EPS figures, previous payments and starter or leaver information in its PAYE-bill troubleshooting guide. If the supporting records are correct but the account remains unexplained, raise the discrepancy with HMRC and retain the case details.
Do not pay an unexplained figure solely to make the screen look tidy, or assume a lower balance means a liability disappeared. Establish what is actually due and seek help promptly where a payment deadline is approaching.
Illustrative example: omitted hours, accurate bank payment
Suppose a cafe discovers that approved additional hours were left out of one employee’s payroll input. The bank payment exactly matched the payslip, so the problem is not a failed transfer. This hypothetical example demonstrates the investigation, not a prescribed correction for every case.
The manager supplies the original approved timesheet. Payroll calculates the missing pay and associated deductions, confirms the appropriate reporting procedure and gives the owner an approved supplementary payment amount. The owner pays that amount, while payroll completes the required report and revised employee documentation.
The correction log records both actions. The accounts are updated to reflect the extra wages and liabilities, and the employee receives a clear explanation. The manager then changes the input process so approved hours cannot disappear between the timesheet and the payroll instruction.
Prevent a recurrence with a focused control
Match the control to the cause. Missing variable pay may need a signed input checklist; incorrect bank payments may need a file-total check; duplicate records may need tighter starter and leaver procedures. A second reviewer should examine unusual changes, not merely approve the overall total.
After a correction, check the next payslip, payroll report, HMRC account and relevant pension records where affected. Keep the original evidence and correction trail rather than replacing the old record without explanation.
If the discrepancy is difficult to resolve, discuss EPOS Accountancy payroll support. Share the affected periods and records through an agreed secure method. Historic corrections and specialist disputes need an agreed scope; fee information is on pricing.