Recovering from Salary or Pension Back Tax Due to PAYE

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Recovering from Salary or Pension Back Tax Due to PAYE

Being employed can be stressful, especially if you have a high-pressure job or work in a small team where your personal performance is constantly measured. Besides your own struggles, figuring out what the employer wants from you can be stressful, too. This becomes a pile of issues when thinking about your taxes as well.

Paying too much tax can happen to anyone, regardless of how well you earn. There are various reasons for this. If you receive employment income from your employer and pay tax through PAYE, miscalculations within the system can sometimes lead to overpayment.

Paying too much tax through the PAYE system can result in an extra tax bill and less take-home pay. If you change jobs, start a new business or change your pension provider during the year, it may cause you to overpay taxes.

There are a myriad of reasons why HMRC may owe you a tax refund. This can include your employer using the incorrect tax code, you wearing a uniform to work, being unaware of the money you’re owed for its upkeep or the misallocation of pension allowances.

Let’s look closely at the top three ways of recovering from salary or pension back tax due to the PAYE system:

1. Overpayments during or at the End of the Year

If you change jobs during the year, you may have overpaid tax through the PAYE system. In that case, make sure you contact your new employer to request a tax refund. 

Suppose your employer pays too much tax through the PAYE system at the end of the year. In that event, you have the option of transferring the overpaid tax from the current year to the previous year or claiming the overpaid tax back.

What to Do: If you change pension providers during the year, you must contact your new provider after you have completed your tax return. This way, you can claim the right amount of overpaid pension tax back.

If you do not have a previous year’s return because of a job transfer, you can transfer the overpaid tax from the current year to the return for the first year of your current job. 

2. Overpayment of Tax by Pension Providers

There is also a tendency for overpaid taxes if you changed pension provider during the year and your pension provider has not claimed the overpaid tax from your previous provider.

The only exception is if you moved from another pension provider during the year. If you haven’t changed pension providers this year, you should contact them directly for a refund.

What to Do: If you have changed pension providers during the year and have an old pension plan, you should contact your previous pension provider to determine if you have an overpayment of pension tax.

If your prior pension plan cannot reimburse the overpayment pension tax, contact the pension provider you switched to. You can also contact your new employer for a tax refund.

3. No Taxable Income or No Tax Due

If you do not have a taxable income or do not need to pay tax, you should not adjust your tax. When the end of the year comes, the tax collected by your employer may overpay.

What to Do: If you do not make any adjustments to your tax at the end of the year and your employer overpaid tax, you should contact your employer to request a refund. Alternatively, you can make adjustments to your tax when you file your tax return as a refund of tax overpaid.


Anything involving taxes can be confusing, but thankfully, there are many ways to recover from salary or pension back tax due to the PAYE system.

If you feel that you are paying more than you should, you should take a moment to look at the situation again. You can make an adjustment to your tax by filing a tax return to recover from any tax overpaid by your employer or pension provider.

If you need to apply for a tax refund, then Tax Refund Calculator is here for you. Whichever type of tax refund claim you make, we can help you with our tax refund calculator for UK claims. Apply for a tax refund and see how much you may be owed today!