Paying extra tax on Holiday pay

tiababy_2

Hi guys

I am currently employed through a agency and have been since Feb 2012. I didn't really take any holiday last year so at the end of the year, I had 11 days left over. Now I only found out last week that I should have been paid this at the end of 2012. (I thought it would be in April 2013)

I'm only 20, So I not really sure how tax exactly works but I earn

£6.23ph, £46.72 a day & £233.62 a week.

I usually pay:-
Tax 15.60
National Insurance 10.51
a week (I'm paid weekly) So I come home with £207 a week

Now my agency have told me they will pay me my 11 days but I know I will lose a lot of money through tax as if they put it through this week I would come home with £598 with over £149 paid in tax.
Now is there anyway I could pay my usual rate of tax on my holiday pay?

As £598 works out at only £37 a day

Savvy_Sue

Tell us what your current tax code is.

That's what would be used: you'll still only pay your 'usual' rate of tax, it's just that higher earnings mean higher tax.

but your tax code may shed some light on things.

CLAPTON

tiababy wrote: »

Hi guys

I am currently employed through a agency and have been since Feb 2012. I didn't really take any holiday last year so at the end of the year, I had 11 days left over. Now I only found out last week that I should have been paid this at the end of 2012. (I thought it would be in April 2013)

I'm only 20, So I not really sure how tax exactly works but I earn

£6.23ph, £46.72 a day & £233.62 a week.

I usually pay:-
Tax 15.60
National Insurance 10.51
a week (I'm paid weekly) So I come home with £207 a week

Now my agency have told me they will pay me my 11 days but I know I will lose a lot of money through tax as if they put it through this week I would come home with £598 with over £149 paid in tax.
Now is there anyway I could pay my usual rate of tax on my holiday pay?

As £598 works out at only £37 a day

tax and NI work like this

over the year you can earn 8105 before you pay tax
that works out at about £156 per week
anything over that you pay tax at 20%

so if you earn 233 per week
then you pay tax on 233- 156 = £77
so tax at 20% on £77 = £15 approximately

you NI work like this
the first 149 is NI free then you pay 12%
so if your case you pay 12% of (233-149)
so 12% of 84 = 10 approximately


However anything extra you earn you pay a straight 20% tax and 12% NI as you have already used your tax and NI free amounts

I'm afraid that how it works and there is nothing you can do about it.

tiababy_2

Savvy_Sue wrote: »

Tell us what your current tax code is.

That's what would be used: you'll still only pay your 'usual' rate of tax, it's just that higher earnings mean higher tax.

but your tax code may shed some light on things.

my current tax code 810L but is due to be changed to 903L

tiababy_2

CLAPTON wrote: »

tax and NI work like this

over the year you can earn 8105 before you pay tax
that works out at about £156 per week
anything over that you pay tax at 20%

so if you earn 233 per week
then you pay tax on 233- 156 = £77
so tax at 20% on £77 = £15 approximately

you NI work like this
the first 149 is NI free then you pay 12%
so if your case you pay 12% of (233-149)
so 12% of 84 = 10 approximately


However anything extra you earn you pay a straight 20% tax and 12% NI as you have already used your tax and NI free amounts

I'm afraid that how it works and there is nothing you can do about it.

On my tax letter it says my personal allowance is 9440 (I think that's the tax free amount)

Thanks for breaking it down for me, I suppose I shall have to grin and bare it. It hurts that I worked for only £37 though

CLAPTON

tiababy wrote: »

On my tax letter it says my personal allowance is 9440 (I think that's the tax free amount)

Thanks for breaking it down for me, I suppose I shall have to grin and bare it. It hurts that I worked for only £37 though

your (and most people) tax allowance for 2013-14 is indeed 9440.
however for 2012-13 the allowance is 8105.