Paid twice in one month due to job change

foostick

Hi - bit of an odd query and I'm sure the title doesn't explain it very well but I'll attempt to clarify!

I'm leaving my current place of employment on Thursday November 1st and I start in my new one on Monday November 12th.

I'll be paid from old job on November 6th and from new job on November 25th, the first payment will be for the month of October plus untaken leave in the old job and then the second payment will cover the two weeks worked in the new place.

Am I going to get battered for tax on the second payment i.e. the first pay from the new job?

molerat

If you get your P45 processed by the new employer before the pay date you will pay the correct amount of tax for the year to date. Yes you will be taxed on the whole amount but it will be the correct tax. If the P45 is not processed you will likely underpay tax as both employers will use the same tax month so the tax free allowance will be allocated twice and the underpayment will be picked up on the next pay after it is processed.

Comms69

foostick wrote: »

Hi - bit of an odd query and I'm sure the title doesn't explain it very well but I'll attempt to clarify!

I'm leaving my current place of employment on Thursday November 1st and I start in my new one on Monday November 12th.

I'll be paid from old job on November 6th and from new job on November 25th, the first payment will be for the month of October plus untaken leave in the old job and then the second payment will cover the two weeks worked in the new place.

Am I going to get battered for tax on the second payment i.e. the first pay from the new job?

Not really, your yearly gross will not be affected significantly. The calendar month plays a very small role in this

chrisbur

Comms69 wrote: »

Not really, your yearly gross will not be affected significantly. The calendar month plays a very small role in this

Depends on what you mean by "not be affected significantly"
Getting two payments in one tax month results in you having 13 months pay as far as tax is concerned. One of these payments will have no tax allowance to set against it and if you are in the 40% band there will be a reduced or no 20% band allowance for it either.
The extra tax paid as a result of this is a fairly common query on this forum, an extreme case (hopefully not as bad as this for the OP }can be seen here....

https://forums.moneysavingexpert.com/discussion/5892620/impact-of-old-job-monthly-pay-schedule-affecting-tax-liability-at-new-job

foostick

Cheers for the replies all.

I've spoken to our HR and the simple solution is just finish a day early on the 31st. So whilst the pay will drop into my account on the 6th November, it'll be for the period of 1st - 31st October.

As far as they're concerned that means it should resolve the issue? I don't really get any of this as I've never had to consider it given I've been in the same company all my working life!

molerat

Your HR obviously don't understand the PAYE system then. If you are paid on 6th Nov you are taxed in November using November's tax allowance. The second payday will also be in November and, depending on whether your P45 is processed or not, you will correctly pay a lot of tax or incorrectly pay too little tax. The problem is the actual pay date and not the paid up to date, a 6th pay date will always be problematic when changing jobs.

JCS1

Tax Periods run 6th of month to 5th of the next, so HR are incorrect.

chrisbur

foostick wrote: »

Cheers for the replies all.

I've spoken to our HR and the simple solution is just finish a day early on the 31st. So whilst the pay will drop into my account on the 6th November, it'll be for the period of 1st - 31st October.

As far as they're concerned that means it should resolve the issue? I don't really get any of this as I've never had to consider it given I've been in the same company all my working life!

This idea just demonstrates that your HR do not have the faintest idea how PAYE operates. As others have said it has no affect on what will happen as tax is judged on when it is paid not when it is earned. Worse though even if this was possible it would just move your payday from being in the same tax month as your first new payday to being in the same tax month as your previous month's pay from your current employer. Result the extra tax you are going to pay at your new employment would now be paid at your old employment, and also get one day less as you are leaving earlier. Overall you would end up poorer.

Hopefully this HR have nothing to do with running payroll; either way they should learn about PAYE if they are going to give advice on it.

foostick

Right...well my P45 is going to be available on the in November so can get that to my new employer before the second pay date essentially.

All I'm really trying to calculate is how much I'm going to receive from the second salary after tax etc so I know how much I have to work with until the next paydate, what's the easiest way to calculate that?

Assume it would be calculate the estimated gross amounts for the two pay cheques as a total and then apply the deductions? As it would be my tax free allowance for the month of November that's affected?

Apologies if I'm missing the point, just never had to deal with this!

agrinnall

In many, perhaps even most, cases Payroll is either a separate function from HR or is handled as an expert section within the HR department. The general HR team probably won't have a clue about the way payroll really works, and it seems that's what's happened here.