Payroll Issue - How to avoid being out of pocket?

Claree__x

Hi all,

Hoping you can help me.
I work for an agency and submit a weekly timesheet. This week, the company has processed my timesheet incorrectly - which has resulted in me not being paid (I sent a T/S for this week on Wednesday as I am out of the office and it was processed as for last week which has overridden the one sent on Friday so the system thinks it's past the deadline).

They have suggested that they pay me double next week but with a £50 "apology" payment on top. I have enough savings to see us through the next week but I am concerned with the tax aspect of it.

If I work with my normal weekly salary I pay around £28 tax, £1 SL and £21 NI. If I work with double that plus £50 I would pay £105 tax, £34 SL and £21 NI so my take home figure would still be around £50 short of 2 weeks wages - or would something be in place to stop that happening?

I understand that tax is cumulative over the year so it will work itself but with HMRC it's not instant (what is?!), and I can just about manage being down for 1 week but not sure about medium/long term.

My basic understanding - from manual payroll at college, so you can correct me if I'm wrong! - is that if a higher payment goes through next week the tax will be worked out as if I was going to earn that amount every week going forward so would be worked out as a cumulative figure of the gross amount I'd earn over the tax free allowance for the year - and therefore I'd be taxed on more than I should be, although it'd still be at the same rate.

I don't want to be a nightmare about it 'cause I know these things happen but I'm just trying to ensure that I don't end up out of pocket (again) because of payment issues. I know they have no control over HMRC but unfortunately it'd be my bank account it's affecting.

nomunnofun

You forget that, because you did not get paid last week, you will get two weeks personal allowances next week and, therefore, the tax should be fine. The NIC will be higher though as you will not benefit from the 'NIC free' amount in the week that you were not paid - NIC is not cumulatively calculated.

Claree__x

nomunnofun wrote: »

You forget that, because you did not get paid last week, you will get two weeks personal allowances next week and, therefore, the tax should be fine. The NIC will be higher though as you will not benefit from the 'NIC free' amount in the week that you were not paid - NIC is not cumulatively calculated.

NIC I'm not that fussed about 'cause it seems to be the same amount anyway, and it's very much the lesser of the two evils. I didn't take that into consideration about the 2 weeks allowance though - if I calculate it as a 2 weekly payment it is much more agreeable.

Thanks for your help! :j

zygurat789

nomunnofun wrote: »

You forget that, because you did not get paid last week, you will get two weeks personal allowances next week and, therefore, the tax should be fine. The NIC will be higher though as you will not benefit from the 'NIC free' amount in the week that you were not paid - NIC is not cumulatively calculated.

Payrolls can usually be calculated weekly, fortnightly, fourweekly, monthly, quarterly or annually, all they have to do is calculate yuors fortnightly this week and then revert to weekly and everthing is hunky dory

chrisbur

First the easy bit, this will not affect the tax that you pay (other than a bit extra due to the £50 extra you are going to be paid) This early in the tax year you will allmost certainly be on a cumulative tax code so either thid week you will get a tax rebate and next week pay a bit extra with the two together equaling what you would normally pay over the two weeks or nothing this week and next week you pay what you would normally over the two weeks. On cumulative tax any correction is instant.

The student loan and national insurance are a different matter. No idea where you got your NI figure from but if you work your two weeks pay as one week you will pay a lot extra in NI. I cannot quite get to grips with your figures but if I double what you appear to be getting and add £50 I get an NI figure of about £77.

What you actually pay in Student loan and NI will depend on how your payroll treat your payment next week. If they treat it as one week's pay you will pay the extra SL and NI. If they treat it as two weeks' pay you will just pay double what you would normally. In order to treat it as two weeks your pay office will have to adjust in some way what they want to happen to your pay proberbly by manually inputting adjustment figures.
Only your pay office can tell you what they are going to do; you need to ask them about this.

chrisbur

zygurat789 wrote: »

Payrolls can usually be calculated weekly, fortnightly, fourweekly, monthly, quarterly or annually, all they have to do is calculate yuors fortnightly this week and then revert to weekly and everthing is hunky dory

Unfortuneately this is not usually as simple as it appears. The pay period on a computerised payroll will be set for a group of employees if it is altered all the employees who are normally paid weekly will be paid fortnightly. There are ways of doing it but they do require the payroll department to manually adjust figures in some way.

zygurat789

chrisbur wrote: »

Unfortuneately this is not usually as simple as it appears. The pay period on a computerised payroll will be set for a group of employees if it is altered all the employees who are normally paid weekly will be paid fortnightly. There are ways of doing it but they do require the payroll department to manually adjust figures in some way.

Yes it is. You are obviously thinking of an inflexible system. the pay period should be an attribute attached to the employee not a group.

zygurat789

chrisbur wrote: »

First the easy bit, this will not affect the tax that you pay (other than a bit extra due to the £50 extra you are going to be paid) This early in the tax year you will allmost certainly be on a cumulative tax code so either thid week you will get a tax rebate and next week pay a bit extra with the two together equaling what you would normally pay over the two weeks or nothing this week and next week you pay what you would normally over the two weeks. On cumulative tax any correction is instant.

The student loan and national insurance are a different matter. No idea where you got your NI figure from but if you work your two weeks pay as one week you will pay a lot extra in NI. I cannot quite get to grips with your figures but if I double what you appear to be getting and add £50 I get an NI figure of about £77.

What you actually pay in Student loan and NI will depend on how your payroll treat your payment next week. If they treat it as one week's pay you will pay the extra SL and NI. If they treat it as two weeks' pay you will just pay double what you would normally. In order to treat it as two weeks your pay office will have to adjust in some way what they want to happen to your pay proberbly by manually inputting adjustment figures.
Only your pay office can tell you what they are going to do; you need to ask them about this.

The £50 was compensation and, therefore, not subject to tax & NI.
This is their mistake and they have to sort it, youare,however, getting £50 compensation look on this as covering any small extra NI and tax deducted, you after all still in profit.

Claree__x

Thanks for all your help.
I have gone back to my consultant with my fears and he is going to check with their accounts dept how it will be processed so that I don't lose out. Obviously they are offering the £50 compensation which is fine, but really shouldn't be to make up any shortfall - IMO at least.

The figures I used were from the listentothetaxman website, I possibly copied something down in error though [Quick check says I have, £66 is correct].

I'll wait and see what he comes back with this afternoon but thank you all for helping ease my stress!

nomunnofun

zygurat789 wrote: »

Yes it is. You are obviously thinking of an inflexible system. the pay period should be an attribute attached to the employee not a group.

I wonder how much employers in such a situation will be influenced by the need to avoid an amended RTI submission.

The op has not received a payment today which is week 1 of the tax year. I can't see why a payment can't be run now unless, as I have said, a submission for this week has been submitted.

On a related matter I spoke to a butrcher last night who, for years, has been paying a net weekly wage, currently £200, to his only employee. His accountant , to save on administration, has calculated his payroll quarterly and forwarded a cheque to HMRC. He has been informed that submissions now have to be made weekly - not a happy bunny!

chrisbur

zygurat789 wrote: »

Yes it is. You are obviously thinking of an inflexible system. the pay period should be an attribute attached to the employee not a group.

If this is the case then that could well be a way to do it; but it still needs the payroll dept. to make that adjustment.
My point is that the OP needs to find out from the payroll dept. what action if any they are taking, it does not matter what is right or wrong often payroll depts. do not bother or do not know how to do the right thing they just rely on the computer to get it right.