Why is PAYE deduction double this month?

decca2013

Hello, I'd be very grateful if you could help me understand an increased deduction on August's payslip. Here are the details:

Basic pay before deductions is £2710 (usual, salaried amount) and for June and July the PAYE deduction has been £129.05, and NI £213.50. This month NI is the same but £252.80 was taken for PAYE. Can you help me understand why?

If it helps the tax code is 1060L. Many thanks.

molerat

What was your pay for April and May ? The correct PAYE deduction for £2710 with a 1060 code is £365 ish (without taking pension etc deductions into account) so I assume you had no income for those first two months and tax is now catching up. If so expect £365 next month.

Dolgoch2

I have a similar issue as decca2013.

My pay last month was £4560 and I paid £805 in PAYE. This month my pay if £4550 and I've paid £1001 in PAYE. My tax code is 1070L.

Why has it gone up?

decca2013

I'll check April and May's payslips tomorrow, but I seem to remember I had some overtime paid in May and in April I was paid an extra £4k in pay arrears (pay went up when I gained a qualification last FY but they didn't implement the pay change for a few months).

agrinnall

Well as molerat has pointed out the 'normal' deduction for tax would be a fair bit higher than either of those figures, and the NI could be on the low side too. As it happens your monthly gross is around the same as mine, and I pay £317 tax and £204 NI (my taxable gross is lower because of pension and other deductions). I think you'll need to post the figures for April - July in order for anyone to make sense of what's happened.

Dolgoch2, you should start your own thread so that the responses don't get mixed up.

decca2013

Thanks for your response, I'll update the information tomorrow after I've looked it up.

chrisbur

The extra pay you received in April resulted in you paying some tax at 40%. Your gross after that was a lot lower obviously so each month some of the tax you paid at 40% has been converted to tax at 20%. This has resulted in a reduction in your tax for those months.
Without the full details cannot put exact figures on it but will later if you post the taxable gross for each month and tax paid. It looks like this month was the last adjustment converting the last of the 40% tax to 20% tax so next month your tax will be the normal figure of around £365 on £2710.

decca2013

So April's figures are £7435 basic pay with £1843 taken in PAYE.

And May was £2820 and £170.25 PAYE.

CLAPTON

decca2013 wrote: »

So April's figures are £7435 basic pay with £1843 taken in PAYE.

And May was £2820 and £170.25 PAYE.

presumably these figure include pension payments?
tax is based on the amount after any pension contributions are deducted

chrisbur

decca2013 wrote: »

So April's figures are £7435 basic pay with £1843 taken in PAYE.

And May was £2820 and £170.25 PAYE.

These figures certainly indicate that as I suggested earlier you have paid tax at 40% which has then been gradually converted to tax at 20%, lowering your tax figure for these months. As CLAPTON says to show exact workings need the pension figure as you will be on the net pay arrangement as in contracted out pension scheme.