PAYE contributions on first payslip despite being below tax free allowance.

Ryan123x

So I'm fairly ignorant and don't understand how taxes work yet.

Iv'e just started my first ever job, I'm paid every 4 weeks and work part time 20 hours a week. Iv'e received my first paycheck that only covers a week's worth of wages (because of when I started) and Iv'e been paid £134.86 with a PAYE contribution of £26.80.

I thought I didn't have to pay any tax because I'm earning no where near the tax free allowance of £11,000. Can anyone help me understand what has happened? Am I suppose to be paying tax, if I am it seems like quite a high amount for such a measly income. Is it because it's my first ever job and HMRC doesn't have the right tax code yet, if so should I expect to see PAYE contribution on my next pay cheque, or should I inform HMRC? Is there any way to get the money back if I have been incorrectly taxed?

zagfles

You've probably got an emergency tax code, what is it? The sort you have if HMRC think you have a second job, or if they don't know what code you should have. Contact HMRC and they should sort it out, and you should get a rebate in your next payslip.

Dazed_and_confused

You should have completed a new starter form with your employer and had that been completed correctly (this is my first job....) then you would be on the correct tax code and no tax would have been deducted.

Even if you had ended up on the "emergency" tax code no tax would have been deducted as that allows upto £988/month before tax gets deducted.

As zagfles says you're probably on the code for someone with a second job (BR or maybe 0T).

Make sure you do the new starter form with your employer straight away and that will ensure no further tax is deducted (unless earnings exceed £228/week or £988/month).

dori2o

Ryan123x wrote: »

So I'm fairly ignorant and don't understand how taxes work yet.

Iv'e just started my first ever job, I'm paid every 4 weeks and work part time 20 hours a week. Iv'e received my first paycheck that only covers a week's worth of wages (because of when I started) and Iv'e been paid £134.86 with a PAYE contribution of £26.80.

I thought I didn't have to pay any tax because I'm earning no where near the tax free allowance of £11,000. Can anyone help me understand what has happened? Am I suppose to be paying tax, if I am it seems like quite a high amount for such a measly income. Is it because it's my first ever job and HMRC doesn't have the right tax code yet, if so should I expect to see PAYE contribution on my next pay cheque, or should I inform HMRC? Is there any way to get the money back if I have been incorrectly taxed?

As this is your first ever job you will not have had a P45 to hand into your employer. You should therefore have been asked to complete a new starter checklist

If the employer has acted correctly they should have asked for this information, and based on you having selected that this is your only job since 6 April they should have put you on the standard (emergency) tax code on a cumulative basis.

It seems your employer hasn't done this and has put you on the tax code 0T or BR.

HMRC do not know you have started a new job until your first payslip is issued to you and HMRC.

To resolve this call HMRC and give them an estimate of your income this year (until 5 April 2019), and they will update your tax code.

When your employer gets that tax code they will refund you the overpaid tax.

ALTERNATIVELY. If you have a valid passport then you can register for a Personal Tax Account (PTA)online at Gov.uk, and you will be able to update your estimated pay details on there. That will generate a revised tax code.

As your income on this payslip is below the NI threshold you will not be able to use the payslip as proof of ID when registering for the PTA as the verification system does not recognise £0.00 as a valid answer.

Ryan123x

My payslip says I have an OT/WK 1 tax code, not sure what that means.

chrisbur

Ryan123x wrote: »

My payslip says I have an OT/WK 1 tax code, not sure what that means.

This is the tax code HMRC instruct an employer to use if the employee does not have a P45 and has declined to give the details required on a new starter checklist.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/513621/Starter_checklist_v1.0.pdf

Below site has the employers' instruction. If you select no P45 and unable to get declaration you will arrive at 0T week1/month1


https://www.gov.uk/new-employee-tax-code

In your circumstances had you selected that this was your first job or your only job then the emergency tax code of 1185L could have been used, either back dated to April or on a week1/month1 basis.
Either would have meant paying no tax on the earnings you had.