Help with understanding payslip please

Anomaly100

My husband earns £60k with an additional £4200 as a car allowance.

In an effort to cut his tax bill and to reduce the child benefit charge we decided to increase his pension contributions.

He was contributing £300 a month and we've increased this to £900 a month. I estimated his take home pay would be around £3k. But his pay this month has been around £2670.

His tax code is correct but tax paid this month is higher than last month!

So the figures for this month are

Salary 5000
Car allowance 350

Deductions
Tax 1159.45 (an increase of around £170 on last month)
NI 374.7 (same as last month and what I expected it to be)
Pension 900 (equates to approx 17% of gross salary)
Childcare vouchers 243 (signed up before 2011)

Any ideas as to what has gone on? I would have expected his tax to be around £800.

I think his payroll have messed up but want to be sure before he gets in touch.

kazwookie

Has his tax code changed from the previous month?


Look on this months / last months pay slip and see.

Anomaly100

I've checked his tax code and both are 1060L which is what I expect it to be.

chrisbur

Anomaly100 wrote: »

I've checked his tax code and both are 1060L which is what I expect it to be.

To understand what is going on you need to give the following details from both this month's and last month's payslips.....

Taxable gross and total gross if different
Tax paid
Pension
Other deductions (name and amount)
Tax code we have
Tax basis usually shown after tax code (eg mth1,cumulative non-cumulative (may be abbreviated) x o 0 1 anything vaguly like these.)
Taxable gross to date
Gross to date
Tax paid to date
If showing gross and tax paid in previous employment.

You mention a recent TUPE in another post. Did this involve any changes to payroll eg new payroll dept different payday

Looking back to earlier payslips does it appear that last month is higher than normal or the month before lower than normal. I ask as the ammount suggests a possible payment of two salaries in one tax month.

xylophone

http://www.listentotaxman.com/ Input the figures here - it will allow you to "tick the box" for childcare vouchers pre 2011 when you fill in your figures.

Presumably the pension contribution is taken under the "net pay arrangement"?http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm04200040.htm

Anomaly100

Xylophone I've used both that tax calculator and another with his details and both give me the figures I would expect and suggest his current payslip is wrong. I'm not sure if maybe that contribution to his pension aren't being treated as net of tax and that might be the issue. His first payslip with this employer has his taxable pay as 5107 with his gross pay being 5350 minus the childcare vouchers of 243 that would add up.

Chrisbur thanks for your kind offer last months figures at the bottom of his payslip are

Gross to date 16050
Taxable pay 35749
EE Pension to date 900
Tax to date 8115.75
Employers NI to date 1834.44
Employees NI to date 1124.10
ERs Pension this period 300
ERs pensions to date 900


This months figures are

Gross to date 21400
Taxable pay 40856
EE Pension to date 1800
Tax to date 9275.20
Employers NI to date 2445.92
Employees NI to date 1498.80
ERs pension this period 300
ERs Pension to date 1200

He has been through TUPE and this is his fourth payslip with his new employer.

To complicate matters further his tax code has been 977L for months and its only in the last couple of months its been corrected. But my understanding is that if anything he has over paid tax this year as a result of that.

chrisbur

Anomaly100 wrote: »

Xylophone I've used both that tax calculator and another with his details and both give me the figures I would expect and suggest his current payslip is wrong. I'm not sure if maybe that contribution to his pension aren't being treated as net of tax and that might be the issue. His first payslip with this employer has his taxable pay as 5107 with his gross pay being 5350 minus the childcare vouchers of 243 that would add up.

Chrisbur thanks for your kind offer last months figures at the bottom of his payslip are

Gross to date 16050
Taxable pay 35749
EE Pension to date 900
Tax to date 8115.75
Employers NI to date 1834.44
Employees NI to date 1124.10
ERs Pension this period 300
ERs pensions to date 900


This months figures are

Gross to date 21400
Taxable pay 40856
EE Pension to date 1800
Tax to date 9275.20
Employers NI to date 2445.92
Employees NI to date 1498.80
ERs pension this period 300
ERs Pension to date 1200

He has been through TUPE and this is his fourth payslip with his new employer.

To complicate matters further his tax code has been 977L for months and its only in the last couple of months its been corrected. But my understanding is that if anything he has over paid tax this year as a result of that.

Leaving aside the question of pension for the moment
Assuming these payments are for months 7 and 8 the taxable pay to date figure for month 8 gives a tax due figure that is correct. The tax due figure from month 7 taken from tax due for month 8 shows the correct tax has been deducted.
You say tax code was 977L and changed to 1060L for last two months so I would assume that last month's payslip was the first on 1060L. Tax on that month would have been calculated on the basis of applying this code back-dated to the start of the tax year so reducing the tax due on that month. I would expect to see something in the region of £170 difference between the backdated payment of month 7 and the regular payment of month 8, but to check exactly would need to see the figures for month 6.

Regarding the question of tax relief on pension contributions.
From earlier posts it would seem that a final salary pension has been replaced by something else. Final salary pension would have definitely been deducted under the net pay arrangement but judging by these figures the replacement scheme is not one that is done this way. I would suggest checking the details of this pension to see how the tax allowance is applied, I suspect it is one of those where the tax allowance is added onto the pension fund rather than the net pay arrangement. Not really very familer with these types of pension but seem to remember that you may have to do something about the tax if you pay at 40%. Best to check with your pension provider on this.

xylophone

http://www.hmrc.gov.uk/manuals/ptmanual/ptm044220.htm

How is tax relief given in his scheme?

He is in self assessment so it should all come out in the wash eventually?

See post 13

https://forums.moneysavingexpert.com/discussion/comment/69309677#Comment_69309677