Tax Code Change ?

Donaway

Got my pay slip today and saw that my tax code has changed from 810L to 944L what does this mean in tax terms

also this is the first time tax has being stopped from my pay in this job which i have been in for about 5 months before that i was on JSA

Horseunderwater

944L just mean that you can earn £9440 per year tax free, but each month the code is applied on a cumulative basis of 1/12th of your allowance each time you're paid - so This month it is £786.66 off wage then anything over that is taxed at 20% and next month it will 2/12th's worth of allowance against 2 months of wages and so on as the year goes on. In other words for each month you work and get paid another month of allowance is added on. Quite simple really.
Oh and so add up your Total JSA income along with total you got paid for your job last year to make sure your income was not above £8105, because if it did there will be a small amount of tax due and it can catch people out. HMRC will no doubt send you a P800 if this is the case.

[Deleted User]

810l to 944l means that you will pay around £5 a week less tax

charlotte4940

Yes you will be able to earn up to £9440 without paying any tax. if you have been paying tax and by the end of the year you earnt below £9440 you will get the tax back you paid. I think they take a look at you wage for the month and the computer works it out over 12 months what you would earn. If its less than £9440 then it wont deduct tax it it looks like you will earn over £9440 it will deduct tax.

Donaway

I have to bring the subject up again as i am still not sure about it

I earn £965 per month before deductions i pay £48 tax and £44 NI per month which leaves me with about £873 to take home

Is this correct ?

anamenottaken

Donaway wrote: »

I have to bring the subject up again as i am still not sure about it

I earn £965 per month before deductions i pay £48 tax and £44 NI per month which leaves me with about £873 to take home

Is this correct ?

To me the tax looks a bit high for 944L on a monthly basis as is the NI.

Are you paid every 4 weeks or every month?

Donaway

anamenottaken wrote: »

To me the tax looks a bit high for 944L on a monthly basis as is the NI.

Are you paid every 4 weeks or every month?

Every 4 weeks

Horseunderwater

More or less spot on re the amounts.

princessdon

Donaway wrote: »

I have to bring the subject up again as i am still not sure about it

I earn £965 per month before deductions i pay £48 tax and £44 NI per month which leaves me with about £873 to take home

Is this correct ?

Easy way for you to understand it.

You earn 965 every 4 weeks. Annual earnings of £12,545 per year.

You get £9440 tax free.

Therefore you pay tax on 3105 per year.

Tax is 20%, so 20% of 3105 is £621 for year.

£621 divide by 52 weeks is £11.94 pw or £48 (rounded up) every 4 weeks,.