Christmas Bonus and PAYE

Wannabesavvy_2

I am employed by one person, I am the only employee and I have had to set up payroll and pay myself, which is fairly straight forward, although I haven't done it before! At Christmas I noticed a payment into my account from my employer which they later told me it was my christmas bonus,:j, and then asked me to put it through the correct PAYE systems, which I did; I took the total sum paid into my bank account, calculated the PAYE and NI and paid the HMRC as usual. however doesn't this now mean that I now have to pay back Employee tax and NI to my employer??!:(

chrisbur

Wannabesavvy wrote: »

I am employed by one person, I am the only employee and I have had to set up payroll and pay myself, which is fairly straight forward, although I haven't done it before! At Christmas I noticed a payment into my account from my employer which they later told me it was my christmas bonus,:j, and then asked me to put it through the correct PAYE systems, which I did; I took the total sum paid into my bank account, calculated the PAYE and NI and paid the HMRC as usual. however doesn't this now mean that I now have to pay back Employee tax and NI to my employer??!:(

What was your employer's intention in making the payment, was it that this should be a gross payment or was it intended that you actually get this amount as a net payment. If it was gross then in effect your employer has overpaid you and as you say some is due back, but if it was meant as net then you did the PAYE calculation wrong you needed to work out a gross figure for the payroll that would have produced this net payment.

WestonDave

If you got £100 assuming you are paying 20% tax and 11% NI, you need to back calculate the gross by multiplying what you got by 1.4493 (or divide it by 0.69 - gives the same answer!). You then put that higher figure through the payroll so your employer pays the right tax and NI plus employers NI.