Financial expert Martin Lewis is urging workers to scrutinize their payslips this month, highlighting that millions may be affected by errors leading to underpayment.
He emphasizes the importance of verifying tax codes and ensuring compliance with minimum wage laws to prevent financial discrepancies.
Tax Code Verification
An incorrect tax code can result in overpayment or underpayment of taxes. Lewis advises employees to check the combination of letters and numbers on their payslips, as these dictate income tax deductions.
Mistakes often occur after job changes or salary adjustments. If discrepancies are found, employees can report them to HMRC to reclaim overpaid taxes from the last four years.
Minimum Wage Compliance
Lewis also warns that underpayment of the national living wage is a prevalent issue. In 2024, approximately 371,000 individuals on the national living wage were underpaid. Common causes include expenses for mandatory uniforms or equipment and unpaid work hours such as overtime or on-call periods. Employees suspecting underpayment should raise the issue with their employers or contact HMRC anonymously.
Action Steps
To safeguard against financial discrepancies:
- Review Payslips: Regularly check for accurate tax codes and correct wage payments.
- Understand Tax Codes: Familiarize yourself with tax code meanings to identify potential errors.
- Report Issues: If discrepancies are found, contact HMRC or seek guidance from a union representative or the ACAS helpline.
- By taking these steps, employees can ensure they receive their rightful earnings and avoid potential financial pitfalls.
