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Repayment for Erroneous Signing Bonus

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  • Repayment for Erroneous Signing Bonus

    First time poster - been following for almost a year now and wanted some input on this situation.

    I started my first post-residency job in late August but did a week of locums (for the same hospital system) in early August. I had a $25,000 signing bonus that was paid in February. When I received my first check in August, they accidentally paid me the same signing bonus again. They had not yet paid me for the locums ($10,500).

    Lo and behold, they figured out this error and want me to pay them back over the next six pay periods. Fair.

    Today I get an email saying I owe them $25,000 (erroneous second sign-on bonus) minus $10,500 (locums work I had not yet been paid for) equals $14,500. However, I only received somewhere around $16,200 after taxes in my bank account. I should have to repay about $10-11,000 if the difference between both is post-tax (rough math $17,000 - $7000 or in that neighborhood).

    In my mind, they messed up and I should not have to pay back a cent more than what was actually paid to me. I do not want this to come back in a refund later. Am I ignorant or missing something here? Just trying not to lose $5000 for someone else's mistake if I can help it. Thanks for the input.

  • #2
    You can't just give back the 16,200 and keep it clean going forward?

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    • #3




      However, I only received somewhere around $16,200 after taxes in my bank account.
      Click to expand...


       

      Edit: yeah it seems odd.  the difference in money should be some amount they withheld for you based on your W4, which you shouldn't have to pay them for?

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      • #4




        You can’t just give back the 16,200 and keep it clean going forward?
        Click to expand...


        I could (and probably should) do this if it were an option, however the actual amount is the point of contention at the moment. Currently waiting for the finance people to get back to me.

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        • #5
          Did you Inform them of the error or ignore it (knowing it was wrong) hoping they wouldn’t realize it?  If you knew it was wrong and didn’t tell them, that’s fraud and they could fire you for cause.  With regards to the amount, You pay them the amount they paid you (which is the amount pre-tax).  Then they will correct it on your W2.  You’re not in a bargaining position if you didn’t tell them of the mistake...

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          • #6




            Did you Inform them of the error or ignore it (knowing it was wrong) hoping they wouldn’t realize it?  If you knew it was wrong and didn’t tell them, that’s fraud and they could fire you for cause.  With regards to the amount, You pay them the amount they paid you (which is the amount pre-tax).  Then they will correct it on your W2.  You’re not in a bargaining position if you didn’t tell them of the mistake…
            Click to expand...


            Good point. I did not realize what was going on with the amount and I was continually trying to figure out why my first check was so high. I thought it was the locums money tied up in there and there really wasn't any explanation in the paycheck/stub itself.

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            • #7
              The payroll records NEED to be fixed. Assuming the net pay from the duplicate signing bonus was 16,200, you can calculate the tax withholding, SS and medicare. Further, the below assumes W-2 wages on each and no other withholding. Follow the layout and make the Finance folks give you the pay check details of both payments (down to the net).

              The right hand column shows the net amount you would write them a check. They need to adjust the withholding so you pay your correct share of taxes in the records. The Finance problem will be to record the deposit of the check AND adjust the payroll records and get both to reflect in the GL. That is their problem. You will want to confirm your payroll records are adjusted reducing your taxable income by $14,500 for you giving them a check for the $10,203.45. The FIT amounts looks a little high, let them confirm the line item amounts and write the check. You really don't want to stretch this out to multiple pay periods.

               


































































              Dup Sign Locums Net
                25,000.00   10,500.00   14,500.00
              0.352 FIT   (8,800.00)   (3,696.00)   (5,104.00)
              0.062 FICA   (1,550.00)      (651.00)      (899.00)
              0.0149 Med      (372.50)      (156.45)      (216.05)
                16,200.00     5,996.55   10,203.45
              FIT Rate -0.352
              assumed

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              • #8
                You should agree on all figures pre-tax and have the normal tax withholdings done, including in reverse.

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                • #9
                  I believe you should give them $16,200 and let them collect their own [email protected]^^n taxes that they sent in due to their mistake. It’s not up to you to repay the payroll taxes withheld and sent in on “your” behalf. They can sort it out on their 941 and report an overpayment and get the refund (actually, credit to apply against their balance due).

                  As it stands, the employer is asking you to front them what they already paid to the IRS - erroneously - and then your responsibility to hope they reimburse you for the refund when it is credited to their account. Given what has already happened, I wouldn’t give them much cred for getting it right the 2nd time.

                  I will presume you weren’t trying to get a freebie but your integrity on this issue (or lack thereof) is beside the point. (FWIW, I give you the benefit of the doubt.) Very easy to get confused on what is reported on a paystub with multiple income streams and not my biz to judge your intent.
                  Financial planning, investment management and CPA services for medical professionals | 270-247-6087

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