Is income tax calculated on monthly pay?

Hassan424

Hi,

Basically I earn 40.5K a year, so after tax I should earn £2.4k/month.
Last month (March 2018) I did a lot of OT - £1950 worth to be exact.
I was expecting approximately 30% to be taken off that for tax/NI/Student loan etc.
However I just got my payslip (PAYE) and it correctly states the pre-tax OT pay as 1.95K, but it works out as only 1K post tax.

Putting the figures into an income tax calculator I can see that I have been charged as if I were earning 64K a year (i.e. my basic plus OT every month) and subsequently have been charged £500 odd pounds at 40% tax rate.

Does this mean later on in the year I will pay less tax to even it out?
Or do I have to claim it back somehow?

Any advice would be much appreciated

Kind Regards

molerat

A large payment in the first month of the year does skew the tax a little but will correct itself as you go forward.

Hassan424

molerat wrote: »

What is your tax code including any suffixes ? You would expect the last pay of the year to be taxed correctly for the year unless you are on an M1 non cumulative code.

My pay slips states: 1210L CUMUL

molerat

Hassan424 wrote: »

My pay slips states: 1210L CUMUL

I deleted my post because I realised you earned the money in 2017-18 but were paid it in 2018-19 so my comment was not relevant

molerat

Assuming no more overtime the tax system will pay back over the coming months so you will have paid roughly £1150 tax this month, you will pay £371 in May, £371 Jun, £388 in Jul and then the correct normal tax for a £40K salary of £473 going forward. You get a rebate of around £100 for the next 3 months. This assumes no pension deductions etc but shows the general principle.