Difference in tax between monthly and weekly

Candy53

Hi,

I was using calculators to find out how much tax and insurance my son will pay in his new job, and found something interesting.

If people get paid monthly, they pay more tax than if they get paid weekly, as they're getting a lump sum??

How does this work when it comes to the personal allowance? Do people who get paid monthly, pay too much tax by the end of the tax year?


Candy

Savvy_Sue

At the end of the tax year, it shouldn't make any difference at all.

anamenottaken

Candy53 wrote: »

Hi,

I was using calculators to find out how much tax and insurance my son will pay in his new job, and found something interesting.

If people get paid monthly, they pay more tax than if they get paid weekly, as they're getting a lump sum??

How does this work when it comes to the personal allowance? Do people who get paid monthly, pay too much tax by the end of the tax year?


Candy

It is difficult to compare a month with a multiple of weeks - if that is what you have done.

Only February can be divided into an exact number of weeks. So all other months have more time in them than 4 weekly paydays and therefore more tax is paid.

Try it with 5 paydays (eg there were 5 Fridays in August) and you would find weekly paid had more tax deducted.

martinsurrey

Savvy_Sue wrote: »

At the end of the tax year, it shouldn't make any difference at all.

wrong

a weekly employee will pay less NI over 12 months IF they get a bonus in the year that pushes them into a new NI rate in the week that is paid.

zygurat789

martinsurrey wrote: »

wrong

a weekly employee will pay less NI over 12 months IF they get a bonus in the year that pushes them into a new NI rate in the week that is paid.

No one mentioned NI so the previous post was not wrong.

dtaylor84

Week 53 payments mean that a weekly-paid employee may, on average, pay slightly less tax than a monthly-paid employee. But then HMRC may request the underpayment be paid...

Savvy_Sue

zygurat789 wrote: »

No one mentioned NI so the previous post was not wrong.

To be fair, the OP mentioned tax and insurance.

However, I'm still not convinced that I'm seriously wrong. There might be minor differences - but on a weekly or monthly basis the OP's son isn't going to notice.

CLAPTON

martinsurrey wrote: »

wrong

a weekly employee will pay less NI over 12 months IF they get a bonus in the year that pushes them into a new NI rate in the week that is paid.

a weekly employee may pay more NI pay more NI over 12 months if they get a variable pay that pushes them into a new NI rate too

Candy53

Thanks to all of you for your replies.

The info will be there for the future, but his now only possible boss has told him he isn't going to put him on the books, but instead wants him to work for him as self employed.

He didn't discuss his pay on Monday when he went for an interview, although my son was told he had the job. My son was told to go back yesterday afternoon to discuss pay, and came back with the bomb shell that they want him to be self employed.

I was looking into the tax situation because I assumed he would be on minimum wage.


Candy

Savvy_Sue

OH Deep Joy for your son then.

Because it's not actually the boss's decision whether or not someone is self-employed, and not your son's either, it's HMRC's. What line of work is this?

If it's genuine self employment, then he should expect to bill a higher rate per hour than minimum wage - no paid holidays, no sick leave etc.

Candy53

Hi,

Both me and his dad said it was madness what his boss was asking and although he was desperate for a job, to tell him he wouldn't be taking it.

He went to see him this morning, and told him, and the boss said he did want him to work for him so he's putting him on the books, and he starts on Monday.

We don't know why he didn't want to do that in the first place. Anyway, he'll be paid monthly, but he hasn't told him yet if he'll be paid a month in advance. Is this usual, or do people get paid at the end of the first month?


Candy