Old Job Paid in Arrears, New Job Not?

ChloeManoey

Hello all,

I have worked for the city council for almost two years now but I just started a new role within the council at the beginning of January.

My old post was paid one month in arrears.

My new post is paid at the end of the month, i.e. not in arrears.

Today I received my payslip, and payments for both my old job and my new job are showing, as I expected.

Unfortunately, having both payments on there makes the total very high (double my usual pay) and therefore I have paid a huge amount in tax and NI.

My new job pays around £1200 a month, but I have only ended up getting £700 for this job, for the whole of January, due to the tax etc that has been deducted.

It seems to me that if I had finished my old job, taken a month off, and then started my new job.. I would be financially better off, and this just cannot be right!... Can it? It seems very unfair that just because I was paid in arrears, and now I am not, and I am with the same employer, I have massively lost out.

I did speak with the HR department but she insisted it was correct

I have thought about it and thought about it, my calculator is tired now and I would really appreciate some help!

Thanks everybody :}

marliepanda

You'll get it back in a tax refund. Possibly through your pay or after April.

cattermole

You won't get NI back and this is the problem when money is lumped together like this. They should really have done two different payslips for this reason.

Tax isn't the issue because over the year you will only pay on what you actually earn. But NI is different because when you lump money together it massively increases the amount payable.

I.e. if you have two jobs you will pay less NI than one job of the same amount. But doing a calculation on NI you will have lost about £80 if both jobs pay the same i.e. of 1200 per month.

It will make no difference as marliepanda says on tax because either you can get it back at the end of the tax year or it will readjust over the next couple of months when your income is less than it has been this month.

ChloeManoey

Thanks both of you - you are probably right where tax is concerned, though I may have to write and claim it back at the end of the tax year!

They have also deducted a huge student loan repayment, again, I suspect I will have to write to claim that back!

Do you know if there is anything I can do about the NI payment?

cattermole

Once you have put through the pay run its very difficult with NI to do anything about it, so I doubt it.

Unfortunately NI does not work on a tax year as such, it works on what you are paid that week/month, others may no different but I'm not aware of it.

The tax should adjust in PAYE so in month 12 you should get it back or pay little or no tax

Can't help with student loans don't know enough about it, but again what little I do know goes on what you have earned on that pay run gets paid back. I'm surprised a City Council have done it like this because normally it would be a different budget if you are in a different department. Also they will have paid more NI as an employer as well.

chrisbur

First if you could give the actual figures it would help to check the tax and NI. What is needed is gross, tax, NI, month number and tax code along with year to date figures for gross and tax paid.

Without these details it is impossible to be certain of anything but pending the figures changing from arrears to current has probably resulted in you receiving two wages in the same tax month. This means that you have two wages but only one tax allowance to set against it. If this is the case then the tax will almost certainly be correct there will be no adjustment later in the year there will be no tax rebate at the tax year end. If this is what has happened then you will be getting 13 monthly wages in this tax year, if you had taken a month off as you suggest then yes your tax would be a little bit lower but only because your earnings would be a lot lower ie a month's wages lower.

As I said really need the figures to tell for certain so if you can post them will look at them later and do not rely on getting any tax refund as has been suggested by some.

EDIT

Forgot the NI question, again without figures cannot advise for certain but assuming that the two payments have been treated as one then the employer has failed to follow the HMRC guidelines. From the employers guide at
http://www.hmrc.gov.uk/guidance/cwg2.pdf
page 10 advises what to do if the payday is changed, and advises that each payment should be treated separately for NI
"For NICs purposes
Work out NICs using the normal earnings period on each
of the paydays. "

ChloeManoey

chrisbur wrote: »

First if you could give the actual figures it would help to check the tax and NI. What is needed is gross, tax, NI, month number and tax code along with year to date figures for gross and tax paid.

Thank you for your kind offer to help me with the actual figures - I have done the calculations myself and am fairly certain I am due a tax refund, but let me know if you think I've gone wrong somewhere!

My pay to date this tax year is £11749.49.
= (11749 - 9440) * 20%
= £461.89 tax due so far

My "tax to week/month" figure is £775.00 after this pay slip - i.e. £313 too much

__________________________________

Pay from old job = £987.84
Pay from new job = £1211.45

Separate payslips would mean:
NI for old job = £41.06
NI for new job = £67.89
TOTAL = £108.95

What has actually happened is:
Total pay = £2199.29
NI deducted = £186.43.... i.e. £77.48 too much

The same has happened with student loan deductions, I shouldn't have paid anything.. but this aggregated earnings payslip means I have paid £75. I don't believe the pay should be aggregated as *technically* the pay relates to two different months, December and January.


I will ask the payroll department VERY NICELY (sternly) if they are able to provide me with two separate payslips to avoid the overpayment in NI and Student Loans, but I don't hold out much hope at all!!

The tax I will claim back, if it doesn't even out by itself.

I see what you mean about getting 13 lots of wages in 12 months, but last year (due to being paid in arrears) I only got 11 months wages in 12 months.. and so I have still lost out! :mad:

chrisbur

ChloeManoey wrote: »

Thank you for your kind offer to help me with the actual figures - I have done the calculations myself and am fairly certain I am due a tax refund, but let me know if you think I've gone wrong somewhere!

My pay to date this tax year is £11749.49.
= (11749 - 9440) * 20%
= £461.89 tax due so far

My "tax to week/month" figure is £775.00 after this pay slip - i.e. £313 too much

__________________________________

Pay from old job = £987.84
Pay from new job = £1211.45

Separate payslips would mean:
NI for old job = £41.06
NI for new job = £67.89
TOTAL = £108.95

What has actually happened is:
Total pay = £2199.29
NI deducted = £186.43.... i.e. £77.48 too much

The same has happened with student loan deductions, I shouldn't have paid anything.. but this aggregated earnings payslip means I have paid £75. I don't believe the pay should be aggregated as *technically* the pay relates to two different months, December and January.


I will ask the payroll department VERY NICELY (sternly) if they are able to provide me with two separate payslips to avoid the overpayment in NI and Student Loans, but I don't hold out much hope at all!!

The tax I will claim back, if it doesn't even out by itself.

I see what you mean about getting 13 lots of wages in 12 months, but last year (due to being paid in arrears) I only got 11 months wages in 12 months.. and so I have still lost out! :mad:

Month number is missing from your details but I would assume that you are on month 10.
Gross to date 11749.49 tax allowance 10/12 of 9449 which is 7874.16 which gives taxable of 3875 which at 20% gives a tax to date of £775.00 which agrees with the tax to date figure you quote.
Your figures for tax assume that no more wages will be paid for this tax year but in fact you will be getting two more monthly wages this tax year. That is why my calculation had 10/12 of your tax allowance not the full year tax allowance in your calculation.
As suggested in my first post your tax is correct there will be no tax rebate or adjustment due unless your earnings for the last two months fall below the tax allowance for those months. Also as advised if you take a month off unpaid you will loose far more in wages than you gain in reduced tax.
You will have received 13 months wages and you only get the same tax allowance as if you had 12 months so for one month (the extra month paid here) you get no tax allowance.
Regarding last year when you only had 11 months wages you still got 12 months tax allowance, any money you were short that year was due to you having a month unpaid and had nothing to do with tax.


Regarding NI as advised earlier I believe that your employer has failed to follow the guidelines from the CWG2 Employer further guide to PAYE and NICs page number given earlier.


Regarding student loans I know very little about them but I feel that it would be well worth questioning about that as well as the NI but cannot advise anything to back that up.