Changing from monthly to 4 weekly pay, why am I paying more tax?

KM2017 · 21 August 2017 at 5:23PM

Hi Everyone,

I wonder if someone can offer me advice on this issue.

I have recently started a new job which is a slightly higher salary but rather than being paid monthly as I was in my previous job, I am paid 4 weekly meaning I will receive 13 pays over the year. However, my net salary is £600 less than my previous salary, despite my new job having a higher gross salary. I have been advised that this is due to me now having to pay more tax as my tax allowance is lower. I do not understand why I am being taxed more and thought if anything, I would be taxed less as it would be spread out over the 13 pay packets.

Has anyone else had a similar experience where they have moved from monthly to 4 weekly pay and do you generally end up paying more tax if paid 4 weekly? I am annoyed by this as I thought I was moving onto a better paid job.

Any advice is appreciated.

Many thanks

KM2017

TBagpuss · 21 August 2017 at 5:32PM

What are the figures?
Your tax free allowance goes down if you earn more than £100K per year.

You wouldn't end up with less in net income through being paid 4 weekly rather than calendar monthly, but it may be that 1/13 of your new net salary is less than 1/12 of the old.

You could use a tax calculator (e.g. https://www.uktaxcalculators.co.uk/ ) to work out your net salary - this one doesn't show 4-weekly figures, but you an take the weekly figure and multiply by 4!

RichardD1970 · 21 August 2017 at 6:01PM

TBagpuss wrote: »

What are the figures?
Your tax free allowance goes down if you earn more than £100K per year.

You wouldn't end up with less in net income through being paid 4 weekly rather than calendar monthly, but it may be that 1/13 of your new net salary is less than 1/12 of the old.

You could use a tax calculator (e.g. https://www.uktaxcalculators.co.uk/ ) to work out your net salary - this one doesn't show 4-weekly figures, but you an take the weekly figure and multiply by 4!

This one does,

http://www.thesalarycalculator.co.uk/salary.php

Kayalana99 · 21 August 2017 at 6:03PM

You pay the same amount of tax overall, but you will get less income because even with a slightly higher yearly pay - you get 13 pay days instead of 12.

If you do 13 x net monthly salary = £x then divide that by 12....does that look more like what you used to come out with?

It does sound wrong to be £600 less a month, but I guess that really depends on what you are earning.

chrisbur · 21 August 2017 at 6:28PM

The only way to explain this is for you to give full details.
From your P45 need the tax code. the month number, taxable gross to date and tax paid to date.
From your payslip the tax code, week number, taxable gross, tax paid, taxable gross to date and tax paid to date.

Only with these details can anyone explain what is happening.

TadleyBaggie · 21 August 2017 at 6:40PM

HMRC are notorious for cocking up tax codes when a job change happens. The last twice I changed jobs HMRC "assumed" I was working for both companies.

molerat · 21 August 2017 at 6:48PM

If it is your first pay then due to the swap over timing you could have already used your allowance to date, it should then sort itself out next month. As above, more details from the P45 & pay slips required.

diggingdude · 21 August 2017 at 10:05PM

Emergency tax code?

agrinnall · 22 August 2017 at 9:01AM

You say "my tax allowance is lower". There are really only two likely reasons for this: the over £100K salary issue already mentioned, or HMRC have issued an incorrect tax code to your new employer - the most likely reason for this is that they think this is a second job (we see it on here pretty regularly) and you would need to contact them to tell them it's your only job. If you tell us what the code is it should be easy enough to tell.

KM2017 · 22 August 2017 at 2:23PM

Hi everyone, thanks for your replies and advice.

I was told by a payroll assistant that my tax-free allowance would be lower because I am on tax code 1150L. She explained that if I were paid monthly, my tax-free allowance would be calculated as £11500/12 is £958 therefore this is how much I could earn before being taxed and that £11500/13 is £885 therefore I can earn £885 before being taxed. This didn't make much sense to me as income tax is calculated on yearly salary, not how frequently you are paid.

Either way, everyone I have spoken to does not think that her explanation is correct and advised that our payroll often mess things up therefore I am going to contact HMRC directly to discuss this.

agrinnall · 22 August 2017 at 3:59PM

Actually, now you've written it out what she says does make sense. While your personal allowance covers an entire tax year for payroll purposes it is applied per pay period, and what she has told you is correct. Whether the calculations are correct is another matter, but the theory is right.

Changing from monthly to 4 weekly pay, why am I paying more tax?

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