Tax on holiday pay

doodlehumlucysmum

Hello,

Tried a goole search but couldn't reall find anything. Baiscally just got my holiday pay and got tax NI and for the first time student loan deducted.

I'm an agency worker and for each hour worked 90p is deducted and put in a 'holiday pot' with acumilates and when i want to take holiday the money come out of this 'pot' the only reason i ask is that i have paid tax/ni on my wages and the hours worked whilst accumilating holiday pay.

sorry not sure if i making myself clear.

thanks
sarah

CLAPTON

I assume you are asking whether you are tax twice on the holiday pay?
Clearly you should not be but without any figures its impossible to see.

If you want to post up the full figures for a typical pay packet and one with the holiday pay then it might be possible to see what's what.

rosysparkle

I work for an agency too, and have some of my wages deducted for holiday pay. I'm not taxed on the holiday pay till I take holiday, though.

As an illustration, here are the figures from last week's payslip:
Tax code 603L
Premium (pay) 30 hours rate 9.91 £297.30
Deduction hol pay rate (0.91) (£27.30)

Total pay - £270.00
tax - £30.60
NI - £18.15

Net pay £221.25

£30.60 is the right amount of tax for 603L on £270.00, so I have not been taxed on the 27.30 deducted for holidays

When I take holiday, I pay tax and NI on the amount I take as holiday.

trevormax

It wouldn't be taxed if the deduction of holiday pay was from your gross earnings (before any tax and NI is deducted). Then when it is paid to you, tax and NI are applied to it. The result at the end of the year is you should have paid no more or less tax.

There may be some situations where you might pay more tax, but this would rely on your earnings being very close to the personal allowance amount.

E.g. you earn £6,500 gross this year and after deducting your holiday pay, it takes it down to £5,500. You will be about £100 worse off as you havent used some of your personal allowance.