Years after leaving, the employer asks for overpaid salary: how do I check the demand?

A tax guide does not prove the debt

The Canada Revenue Agency’s payroll guide explains that correcting a salary overpayment depends on its reason, the year of repayment, and other conditions. Net and gross repayment treatment can differ. Our independent answer uses that distinction to organise documents, not to establish that a former employer’s demand is valid. Public-sector procedures, provincial law, and recovery time limits need separate assessment.

Request the underlying calculation

Ask for each pay period, the amount paid, the amount said to be owed, and an explanation of the error. Compare payslips, bank receipts, departure dates, and earlier corrections. Distinguish an administrative error from a dispute about entitlement to a bonus or leave payment. Do not send money to a new account without independently verifying the requester and payment instructions.

Separate repayment and tax documents

Ask whether the requested amount is gross or net, which deductions it includes, and what corrected slip or repayment letter will be provided. Keep the claimed year and current-year information separate. A large figure on a demand is not enough to identify the tax effect, and an amended T4 alone does not settle a contested employment entitlement.

Before accepting a repayment plan

Seek appropriate employment, public-sector, or tax advice with the complete calculation and correspondence. Ask about authority, deadlines, challenge, and the effect of an acknowledgement. Preserve documents even after company access closes. This guide does not decide whether you owe money, calculate a tax refund, or recommend ignoring an official recovery decision.

Hypothetical illustration

Hypothetical illustration: a former employer says a previously approved bonus was paid in error, but its letter gives only a gross total. The employee keeps the approval, payslip and demand together, then asks which pay period and entitlement were supposedly wrong. An administrative duplicate payment and a disagreement about whether the bonus was earned are different questions. The employee should obtain the calculation and tax-document explanation before deciding whether to acknowledge or repay the demand. This comparison does not decide the validity of the debt or the applicable recovery period.

Questions to ask and next steps

Useful questions include: 'For each pay period, what was the gross and net amount paid, and what is the claimed overpayment?' 'Is the demand based on gross or net pay, and which deductions are included?' 'Will you provide a corrected T4 or a repayment letter, and how does this affect my tax return for that year?' 'What is the legal basis and the applicable limitation period for this recovery?' If the employer does not provide clear answers, seek advice from an employment lawyer or a tax professional, bringing the demand letter, payslips, bank records, and any written approvals. If the issue remains unresolved, you may need to respond formally or challenge the demand through the appropriate legal process.

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