Payroll Service

Tesco payroll error to cost nearly £10,000,000 in reimbursements

140,000 current & former Tesco employees in the UK were underpaid

Tesco payroll personnel accidentally paid 140,000 UK employees under the UK National Living Wage. The store will be reimbursing relevant staff an expected total of £9.7 million. Reimbursement for most individuals is expected to be up to £40.

Payroll Accuracy

The issue was caused during payroll processing where voluntary contributions made by staff (to pensions, cycle to work schemes, childcare etc.) had not been handled correctly causing pay after salary sacrifice to be below the UK’s National Living Wage.

The error was found when Tesco was in the process of auditing data during their implementation of a new payroll system. Tesco has commenced contacting and reimbursing affected individuals. Appropriately, Tesco has also informed HMRC and briefed USDAW of the error.

The UK and ROI CEO at Tesco, Matt Davies, said:

As soon as our own review identified this issue we took immediate action to resolve it and establish which colleagues are affected.

“We’ve apologised to our colleagues and our priority now is to talk to them about how this affects them individually, and make any necessary payments. We expect payments to be up to £40 for the majority of affected colleagues.


A record number of UK employers have been named and shamed this year for underpaying workers. 359 businesses underpaid 15,513 workers a total of £994,685 – the retail sector has the second highest level of offenders. For more details click here.


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