How to expect holiday pay to be paid?

Wkdwill

Hi

Im wondering if someone could help me, DH works for an agency and gets paid weekly, he has accrued 2 weeks holiday which he will be taking after today and has been told that the holiday pay will be paid with his wage next week, now my problem is the tax man is going to see this as a massive wage and take a very large chunk of it.

I would have thought that they would carry on paying his wage weekly instead of paying it all at once, are they just taking the lazy way out? and could we ask them to pay it weekly?

I am pretty sure that the tax taken from 3 weeks wages all in one will be a hell of a lot more than 3 individual wages.

I just dont want us to be left struggling.

Thanks

SomeBozo

I am pretty sure that the tax taken from 3 weeks wages all in one will be a hell of a lot more than 3 individual wages.

It will be more tax as he has paid more, but the % of the tax should be the same. (if you get what I mean).

Bozo

epsilondraconis

It should all be okay because the amount he is taxed is based upon his earnings over the course of the year. Only if he earns above each threadhold designated by the inland revenue, will any earnings above that threshold, be taxed at the higher rate.

Therefore he could get paid his year's salary in the first month and still effectively be taxed the same as if he was paid equally over the 12 months.

Bean_Counter

When we pay holiday pay to our guys, the system averages out the tax e.g. if we pay someone one weeks normal pay and two weeks holiday pay, it averages the tax out over a three week period so the % of tax paid is not higher. It would also then treble any other deductions such as pension, arrestments etc. Not sure if all systems are the same though.

DCodd

If he has been paid for three weeks in one, for the two weeks where he is not "earning" anything i.e. his 2 weeks holiday, he may well get a tax refund via his wages, unless they revert him to week1 month 1 one basis for those two weeks.

Wkdwill

Thanks everyone.

Im just going on a previous experience, again DH got paid his holiday all at once and the tax man got a big chunck of it, he ended up being £50 a week shorter than usual, must have just been that employer maybe.