Working out tax for overtime

Lozzy10

Hi, I need to know how to work out what tax I'm paying on the overtime I do. I get as standard £386.16 a month for my base rate, but I often do a lot of overtime every month.

For example, last month I did 53.75 hours @ 6.658 p/h and 23.00 @ 9.987 p/h which totals my wage for that month at £386.16 for the base rate, £357.87 in normal overtime and £229.70 for Sunday overtime. This means my total wage came to £973.73. Of this, I was taxed £68.00 in income tax and £58.72 in national insurance.

Can anyone please help me work out where I start getting taxed, as I like to total all my taking up myself and check the total amounts for each month. Also what is the current % for both income tax and national insurance?

Thanks, Lozzy

nikki1520

Hi Lozzy

Basic rate tax is at 20% on all earnings over £125 a week or £540 a month. Assuming this is your only job, you only pay this rate. The 40% rate kicks in at £37400.

NIC's vary depending on whether you're opted in or out for SERPS. You pay no NIC for the first £412 a month and then between 1 and 11% depending on your status (your payslip should show your contribution rate letter)
Try here:http://www.hmrc.gov.uk/helpsheets/e12.pdf
All laid out for you to go through

suso

what tax code are you on?

if it is 647L - then your first 539 per month is tax free. you are then taxed at 20% on earnings above that.


your total pay was 973.00, deduct the 539 leaves 434.00 taxed at 20% = £86.80.

The reason why you paid less tax could be because of the code you are on (if its a higher number then you pay less tax.) or because you are on a cumulative code and have some unused allowances from the previous month which have been carried forward to this month (ie in the previous month you earnt less than the 539.00 standard)

National insurance looks to be about right to within a couple of pounds, I think the lower earnings limit is 95.00 per week and then taxed at 11% on earnings about that

Lozzy10

Thanks for the reply. So using that and having looked at that document, I tried to work out my tax for the payslip I exampled. Here is what I got

Tax for earning after £540 at 20% = £88.76
NI for earning after 476 at 11%(I am letter A, so this ET and % should be correct) = £54.75. This should equal a total deduction of £143.51

The only problem is my wage slip says different to those to figures
The tax for the above example was £68.00
The NI was £58.72. This equals a total deduction of 126.72.

Am I doing something wrong?
Thanks for the quick reply, Lozzy

EDIT: My code is 647L
National Insurance Letter A

nikki1520

Have you been out of work at all this year? If you have only started work recently, you'll get more of your allowance so that you're all straight by April 6th

The tax code and NI letter look normal to me though

Lozzy10

I've only had a few days off sick, but I've had this same job for 4 years this year now, so no long term periods out of work no. I'm not too fussed, I have made myself an overtime calculator in excel and just wanted to firgure out what figure I should put in for the tax deductions. Even though it may not be 100% its close enough so I'm happy. Ive input what you have said and its giving me a resonable figure.

Thanks for your help guys.
Regards, Lozzy

zygurat789

The NI deduction you quote is on £1,009.83 or £36.10 more than you say you earned do you receive any other type of pay, or more usefully what is your total gross taxable pay for the month? NI is straight forward being month by month and should be exactly right ie £54.75 on 973.73.
PAYE is totally different because it is cumulative. You will be allowed to earn 6475/12 each month of the tax year before you are taxed and you will need to use your gross taxable pay to date as your starting point, not pay for the month.

CLAPTON

you have a tax allowance of £540 each month (assuming you are paid monthly)
if you salary is less than 540 in any month then the un-used portion of your 540 is essentially carried over to your next months pay.

So it quite possible that if you have a low income one month i.e. less than 540 and pay no tax. If the following month you earn more than 540 you will pay less tax than if you worked it out by taking just the monthly figures.
From the figures it looks likely the previous month maybe you only earned 440 ish although one needs the totals to date to really say.

chrisbur

The NI you quote £58.72 suggests that you are being paid every four weeks rather than monthly, is that the case?

The most likely explanation for the tax figure is that your code has changed, this could be the tax code itself or the tax basis, this usually shows after yourcode on your payslip.

Can you give your gross, tax, tax code and basis for your last four payslips and the dates they were paid?

tottenham1966

good evening,i wonder if any one can help me with a tax query.my hubby was out of work and managed to find one b 4 xmas. at his job he does 60 hrs a week at 7 pounds an hour and takes home 1330 a month.his tax code is br and from his last company he recieves 150 a month pension.does it sound like he is on the right code as i think 60 hours a week and only 1330 a month seems little for the hrs he does.i havent a clue about tax codes so any help would be very much appreciated.new to the site but loving ot

jem16

tottenham1966 wrote: »

from his last company he recieves 150 a month pension.

What code does his pension use? If it's 647L he really would be better having this code on his job and BR on his pension.