Can someone help me understand this

getmore4less

Paying of the money won't make any difference to the total paid just sort it out sooner.

the caclulation was correct asuming you were not going to be in the 40% tax but you are because you are earning more this year.

Becaue your salary was backened last year you paid less tax because your erned less on average per month.

FireWyrm

getmore4less wrote: »

Becaue your salary was backened last year you paid less tax because your erned less on average per month.

Which is where I'm having the problem. A normal month last year yielded £2814 after tax. This year, even without the correction (according to Chris) it should be £2770 (33242 / 12). This makes me worse off. Something is wrong somewhere and I'm obviously not getting it. Even with the higher basic threshold of £10K rather than £9440, it still works out at £40 a month worse off leaving aside the garnishment. Effectively, that whole £5K payrise has been swallowed.

chrisbur

FireWyrm wrote: »

Which is where I'm having the problem. A normal month last year yielded £2814 after tax. This year, even without the correction (according to Chris) it should be £2770 (33242 / 12). This makes me worse off. Something is wrong somewhere and I'm obviously not getting it. Even with the higher basic threshold of £10K rather than £9440, it still works out at £40 a month worse off leaving aside the garnishment. Effectively, that whole £5K payrise has been swallowed.

Why do you call March a normal month, if you had earned your March salary every month of the year you would have grossed £45000 last year and would have been paying some tax at 40%, you then would not have received £2814 for March you would have received £2755. You only received £2814 for March because your earnings earlier in the year were lower than this.
Tax paid depends on total years earnings, the actual figure you pay for any month can vary depending on how your earnings vary and at what time in the tax year you get them. To get an idea of your true normal earnings add up your net pay for the 12 months of last year and divide by 12 to get a true average net pay for last year which will come out very roughly to something like £2500. This is your net pay that you would have received if you had been paid evenly through the year. Cannot be precise on this without exact figures as NI works differently to tax and you will have paid less NI last year than if you had been paid in equal installments, but lets not get involved in that.

FireWyrm

Thank you Chris, that really helps clarify it. In reality, I havnt had a normal year yet because of when we took maternity leave. I think I will still rather sort this mess out sooner this year than wait until next year as others have suggested. I can argue the toss over the lost hundred or so I have paid later, but I really have to get back into getting something approaching 'normal' pay. I should have followed my gut instinct that paid it off free back in February when I got the tax recalculation. Lesson learned.

To all those who have replied on this thread, many thanks for your time and effort.