Paid Minus Tax

Dar_b

Hello,
I am quite new to this and do not really understand an awful alot about tax.
i recently got paid and when looking at the amount of money that went into my account i thought it was a bit much, then taking a look at my pay slip it shows that my salary went in at £1375 but it showed tax being deducated as -£289.33 and national insurance being £98.89
so i have ended up with more money in my account than my actual salary!!! as the money in my account totalled £1565.44
can any one explain to me why i have received more money?

the only thing i can think if is that so far this year i year i have earned
£6875 in salary
£3181 in overtime
£2005 in commission
£8000 from Danger money (which shows on payslip as gross adjustment)

Thanks

veridisa_2

i think if you have a minus sign before the amount of tax it is a tax refund

Dar_b

veridisa wrote: »

i think if you have a minus sign before the amount of tax it is a tax refund

why would i receive a tax refund? is it because over the last couple of months i have earned alot more than just my usual salary and this month i have no extra earnings?
is this likely to happen again next month?

veridisa_2

simply put when your tax is worked out the system assumes that what you have earned this month is 1 12th of your annual salary and taxes you accordingly.this means that if you have an abnormally high wage you will pay more tax. this is to avoid a shortfall at the end of the year.if in subsequent months your pay is much lower you will pay less tax or even get a refund to balance it out so that your tax for the year is (near enough) the correct amount

mjm3346

Has your tax code changed?

chrisbur

From your figures you have 20061 total earnings to month 5 and received 1375 of that in month 5 itself. That means that as at month 4 you had total earnings of 18686.

In month 4 assuming a code of 647L you would have 2160 tax free allowance so would be taxable on 18686 less 2160 which is 16526. You would be due to pay 20% on 12467 and 40% on the rest ie 4059 which is 2493.40 and 1623.60 a total of 4117.
In month 5 you would have 2700 tax free allowance so would be taxable on 20061 less 2700 which is 17361. You would be due to pay 20% on 15584 and 40% on the rest ie 1777 which is 3116.80 and 710.80 a total of 3827.60.

As you have paid to month 4. 4117 and as at month 5 you owe 3827.60 you are refunded the overpayment of 289.40. The odd 7p is probably accounted for in some of the figures being rounded or my dodgy maths.

This is the way PAYE works, every month it works out how much tax you owe up to that month in the year, from that it deducts what you have paid so far in the year and the difference is what you pay that month, or in this case what you get back.