Tax during maternity pay

dufusmoose

Hi,

Have called HMRC but the employee I spoke to couldn't answer my question, so now I am really hoping someone on here may be able to give me some advice!

I am due to go on maternity leave in June and was wondering if there is a way to calculate the tax I will pay during my leave?

I am starting the tax year being taxed at the rate for my normal annual salary, but obviously the amount I am paid each month will change during my maternity leave. Is there anything I can do to make my tax payments reflect this or do I just have to wait until next April for a rebate? Does my employer (South Gloucestershire council) alter my tax deducations?

I'm really confused and this is playing a major part in how long I can plan to take off with my baby. If I am still paying tax based on my normal salary by the time I hit SMP months only, I'll be left with £30 a month! Any advice would be gratefully received.

Thanks in advance

Kayalana99

It should be automatically done by your employer and you won't pay the same amount of tax as you were on a full salary.

dufusmoose

Thanks, is there any way of me working out how it will be calculated? I'm trying to spreadsheet money during maternity leave and I'm stuck on tax!

dufusmoose

Will it matter that my pay will be different each month until I am only on SMP? Will the amount of tax I pay change monthly?

dufusmoose

Do you know how my tax will be calculated?
Thanks for your help

cattermole

Do you mean you earn a different amount each month with South Gloucestershire Council at the moment?

If so the tax automatically adjusts.

They will be paying you maternity pay, if you have worked for them for the qualifying period so it will adjust accordingly in what they pay you.

In a nutshell you only pay tax on anything over your personal allowance of £10,000 at 20% unless you are earning over the lower threshold for tax and are paying at a higher rate of tax above that threshold.

So total up what you think your taxable income including SMP will be for this tax year, take off £10,000 and times the remainder of it by 20% that will be your tax bill for this year.

dufusmoose

Will I need to ask to be put on a week1/moth 1 rate?!

cattermole

No !

Why would you want that?

They pay you each month (and that will include when you are on SMP).

If you earn less one month the system takes account of it the next month and adjusts, that's why it is called Pay as You Earn.

More than likely when you go to SMP you will get a tax rebate the first month, then it will adjust accordingly.

Just do the caluclation as I outlined above.

dufusmoose

I earn pretty much the same each month at the moment and will be paid by them during my qualifying period, so should it just be automatic? I guess the people to speak to are payroll rather than HMRC?

If I follow rule of -£10,000 allowance and find 20% to calculate my yearly tax bill, how will I know how that will be broken down over the year and what I will pay each month? I go on maternity leave in June so will have a couple of months at normal pay and normal tax before I start maternity.

Thanks for all the advice and sorry if I sound dense- when it comes to tax, I am!!

cattermole

If you already know what you have earn't and will earn up until June + the number of weeks you get on nearly full pay, you know what tax you are paying.

At that point you will have paid the right amount of the tax for the year so far.

So let's say at that point you had earn't £4000. That means you would have £6000 left on your tax allowance. So if the amount you receive in SMP is going to be less than £6000 at that point you won't pay any tax at all. If it was say 10,000 up until that point you would pay 20% tax on your SMP.

If we knew how much you were earning a month we could probably roughly work it out.

dufusmoose

I think I'm beginning to understand!
These are approx figures for my pay during this tax year:

April: £3141
May: £3090
June (maternity pay starts) £3090
July: £3037
Aug: £2250
Sept: £2116
Oct: £1932
Nov - March 2015: Approx £600 a month (SMP only)