Tax on wages

princeofpounds

Actually, I would not rely on the payroll to get your tax right, although it might be in this situation. But muck-ups, whilst rare, are not that rare and so it is good to check periodically.

It's much easier to figure it out over the course of a whole tax year, so when you get that last payslip for the tax year it should tell you your total wages and total tax over the tax year. Then check if that is right. If it isn't write to HMRC and they can refund you if necessary.

peachyprice

LittleMoog wrote: »

The PAYE system assumes that you'll earn the same for each month remaining in the tax year based on what you've already earnt and what that month's amount is- if this would take you over the higher rate threshold you may pay more the 20%+NI and student loan. It then levels out over the next few months, so I always pay significantly less tax the month after a bonus as we get our bonus in April as it's the first month of the tax year. I always budget on losing 40% to tax including NI/SL, and it comes out about right.

This exactly ^^^^^

It has nothing to do with personal allowances. There won't be a refund at the end of the tax year but depending on how much your bonus is and your salary is you may even pay no tax next month and reduced for a few more months.

It all works out right in the end.

McKneff

Oh and as far as Im aware, NI is now 12%

victor2

And as far as I'm aware, NI is just another name for tax.

motherofstudents

I believe it was Benjamin Franklin who made the comment about death and taxes, although others have said similar things. You never know when you might need it....pub quiz

alwaysonthego_2

MOVING THREADS FOR BETTER RESPONSES


Hi, Martin’s asked me to post this in these circumstances: I’ve asked Board Guides to move threads if they’ll receive a better response elsewhere (please see this rule) so this post/thread has been moved to another board, where it should get more replies. If you have any questions about this policy please email [EMAIL="forumteam@moneysavingexpert.com"]forumteam@moneysavingexpert.com[/EMAIL].

chrisbur

strawberrychewits wrote: »

Hi i know im probably in the wrong forum but this is the one i come to most so hoping someone will point me in the right direction.
I have been taxed a 3rd on my pay this week due to a bonus. Will i get this back and if so how?

Was counting on the money for christmas shopping but have lost a chunk to the tax man :mad:

The only way to tell for certain if your tax is correct and if any of this tax you have paid will come back to you is for you to give full figures. You need to give your taxable gross to date, your tax paid to date, your tax code and basis (usually shows after tax code on payslip ) your taxable gross for month which includes bonus, tax for that month and the month number.
Without these details any opinions on your tax position are just a guess.

CLAPTON

LittleMoog wrote: »

The PAYE system assumes that you'll earn the same for each month remaining in the tax year based on what you've already earnt and what that month's amount is- if this would take you over the higher rate threshold you may pay more the 20%+NI and student loan. It then levels out over the next few months, so I always pay significantly less tax the month after a bonus as we get our bonus in April as it's the first month of the tax year. I always budget on losing 40% to tax including NI/SL, and it comes out about right.

whilst this is often stated it is in fact incorrect

the tax systems look backwards not forwards

it takes your accumulated gross pay to date
the accumulated tax you have paid
your accumumated tax allowances

and then works how much tax you owe to this specific period
NI is however simply based on this period

sharp910sh

CLAPTON wrote: »

whilst this is often stated it is in fact incorrect

the tax systems look backwards not forwards

it takes your accumulated gross pay to date
the accumulated tax you have paid
your accumumated tax allowances

and then works how much tax you owe to this specific period
NI is however simply based on this period

Your tax free allowance is divided over the 12 months. Then you pay tax over the amount. They do not lump the 8105 quid at the start, then you start paying tax! It would mean your salary every month would be different, based on how much you have earned.

00ec25

sharp910sh wrote: »

Your tax free allowance is divided over the 12 months. Then you pay tax over the amount. They do not lump the 8105 quid at the start, then you start paying tax! It would mean your salary every month would be different, based on how much you have earned.

with respect your attempt at an explantion adds nothing and misses the very important points that Clapton's perfect explanation offers
saying it is divided over 12 months does not explain to a newbie how it works, it works exactly as Clapton says - cumulative to date