Income tax question

M0ney

I have just used the income tax calculator on here as I suspected I had been taxed less than I should have been, my numbers on the calculator were....

Gross Wage £3,274
Taxable Wage £2,420
Tax Paid £484
Tax Free Allowance £782
National Insurance £315
Take-home pay £2,230
Student Loan £172
Pension £73
Pension HMRC £29

But in reality I took home £2,305, tax £444, NI £310 SL £167 Pension (Me) £73 (Employer) £169.

My tax code is 937L and the numbers from this wage is my basic salary only and sometimes I have a gross wage of well over £5,000. Obviously this pushes me well into the 40% tax bracket, I'm a little concerned I will see a big bill mid next year incase they aren't taking enough and also wondering if they are giving me back some of my 40% tax contributions....

If there is anyone who can tell me the answer I'd be grateful.

n.b. these numbers are rounded to the nearest whole pound.

Ruthy1604

Does your tax code have a W1 or M1 after it ?

If not, your tax figures are worked out cumulatively, not per month. To check the figures we'd need tax year to date amounts as it may be that you overpaid tax in a previus month or had low earnings in the early part of the tax year.

M0ney

No on my payslip it just says 937L / 0

Ruthy1604

Ok. Have you had the same job for the whole of the tax year (ie since April)? If you moved from a previous job/JSA, did you hand in a P45 to your current employer?

M0ney

No I have been permenantly employed by this company since January 2012. Who says tax doesn't have to be taxing HAHA!

Ruthy1604

Your tax figures are worked out cumulatively, not per month. To check the figures we'd need tax year to date amounts as it may be that you overpaid tax in a previous month. This months taxable is below the 40% tax band so you might well be getting a small repayment of an earlier months 40% tax.

M0ney

YTD figures are as follows...

Total Gross £32,892.53
Taxable Pay £32,440.81
Tax Paid £5,360.90
Employee NI £2910.63
DC SE EE Con -£217.50

I think the minus -£217.50 has something to do with pension contributions. I'm really grateful for coming back to me each time. :-)

Ruthy1604

is the taxable pay figure correct ??

M0ney

I'm really not sure this is how it appears on my payslip, there never seems to be much difference between total and taxable.

Ruthy1604

I think the difference between gross and taxable is your pension contributions which may be deducted before tax (some schemes run like this).

So. If we assume your taxable figure is correct, and the pay in question is up to month 9:

Taxable pay £32441
Personal allowance (9370x9/12) -£7027
Tax is due on £25414

Tax at 20% (32010 x9/12)x20% £4801
Tax at 40% (the amount not taxed already) 563
Total Tax due so far this year £5364

Total tax paid £5360 per your payslip, so give or take a couple of pounds for rounding, your payslip figures are correct.

M0ney

Ruthy, that is fantastic. Thank you, I really like to keep a close watch on all my finances and you have been a big help. I will no doubt come back and use this to check the accuracy of my income etc. in the future.