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Posted Fri, 20 Aug 2021 09:37:45 GMT by Register_1984
An employee receives contractual maternity pay in excess of statutory maternity pay. In her contract, she is required to repay all contractual maternity pay if she does not return to work for a period of 6-months following maternity leave. The employee has informed company that she will not be returning to work. Should the employee: 1) repay contractual maternity pay gross of tax, and reclaim the overpaid tax from HMRC herself; or 2) repay contractual maternity pay net of tax, and company makes adjustments with HMRC Most contractual maternity pay was received in the prior tax year, and will be repaid in the current tax year Some amounts of contractual maternity pay were received in the current tax year and will therefore be repaid in the same tax year as received Thank you
Posted Fri, 20 Aug 2021 10:59:49 GMT by HMRC Admin 20
Hi Register_1984,

A repayment of Occupational Maternity Pay is treated in the same way as an unintentional overpayment of salary.

You should advise the employee of the net difference overpaid and discuss how this will be paid back.

Please see the guidance at CWG2, paragraph 1.19 - linked below:

CWG2: further guide to PAYE and National Insurance contributions

Thank you.

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