The following is a staff writer post from MikeS. He is a married father of 2. So, with the cat, he ranks number 5 in the house. He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.
I know I tend to be a little overzealous when it comes to keeping track of my money. However, I witnessed two events recently with two different coworkers that made me think that being overzealous is a good thing. In both cases, there was a change to their paychecks that they did not monitor and the changes resulted in headaches for both of them.
My first coworker received a promotion mid-year in 2014. She went from an hourly employee to a salaried employee. Along with that change, she also received a raise. When she received her first post-raise check, it was higher than her normal check, so she thought everything was ok. It turns out, everything was not ok. You see, she had been paid before on a bi-weekly schedule as on hourly employee. Salaried employees are paid bi-monthly.
So, even without a raise, her paycheck would have gone up, 26 paychecks to 24 paychecks. She did not do the math to make sure that her gross paycheck was correct. She did not notice there was a problem until the annual salary discussion occurred in 2015. Only then did it come up that her paycheck never reflected the raise she was supposed to get with her promotion. She will receive the back pay that she was owed, but I bet it would have been nicer to have that money in her pocket all along.
My second coworker made an adjustment to her HSA contribution late in the year last year. Her paycheck was ok, but the HSA account received too much funding from the company. Part of her last contribution at the end of December was rejected because it would have put her over the IRS limit for the year. She did not find out about this until February when she received a credit back in her paycheck. It turns out the company had put an additional contribution in her account for her. Her taxes were complex this year because she had to request a corrected W-2, as the numbers that were initially reported were incorrect.
It Pays to Pay Attention
In both cases, had they checked the numbers when a change occurred, they might have caught the mistakes sooner and been in a position to correct them before they caused any more problems. Whenever I have a change to anything in my process, be it a salary change, 401k contribution change, anything like that, I am always sure to check that first post-change check to ensure that everything was processed correctly. I was able to catch a problem with my first paycheck this year.
The benefits that I selected for 2015 did not make me eligible for a company contribution to my HSA. I instead opted for a larger deductible and lower premiums. Naturally with my first paycheck in 2015, I looked at not only my paystub, but also my HSA account to make sure everything was alright. What I found was that the company had given me the contribution anyway.
Normally, I try not to look a gift horse in the mouth, but I needed to know what they were planning on doing with the erroneous contribution. If they were going to leave it in the account, I needed to adjust my contributions, otherwise I would be over the limit for the year. When I called HR about the problem, they were aware of it. The same mistake had happened to over 2,000 other employees. It was a literally a million dollar mistake by someone. I still haven’t found out if they are going to take the money back yet or not. My current plan is to wait until November to adjust my contributions.
Ever had a mistake with your paycheck?