The head of payroll at my company just discovered that they have been paying me the incorrect amount for the past few months and that they owe me money. He says that they will issue a check next month for the amount they owe me and that it will be issued separately from my normal paycheck. Will I end up losing any money from this blunder if I am taxed on the amount they owe me rather than it having been part of those original paychecks?
closed as off-topic by gnat, Wesley Long, Joe Strazzere, Chris E, Jim G. Dec 31 '14 at 1:00
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Thi is a US-centric answer but I suspect many other countries operate the same way.
In the end the taxes for the whole year should be the same. However, you may or may not end up having a refund from the government rather than getting all you want in the check.
The reason why is that this separate check will be taxed a rate comparable to the rate for that amount not your ordinary rate. So if the change is large, you might have more than you need taken out. If the check is smallish, you might have less taken out and your eventual refund be lower or even owe money. They are probably issuing a spearate check because to combine it with your usual check would be to put you in a much higher tax bracket and that could cause you to get less money up front. Where this can be a real problem is if the amount you should have been paid was enough to push you to a higher tax bracket. If you didn't pay those taxes through the year, it is possible to have a nasty surprise when you file your taxes. Until you know, I would hold onto this cash.
This is why you should always check your leave and earnings statments to make sure you are being paid what you should have been getting. The sooner a problem like this is found the less impact.
If at all possible get them to issue the check before the end of the year. Crossing tax years on something like this can be a problem as well.