First salary calculation pls

Dazed_and_confused

If you are expecting £2,667 gross for a full month then I think it is fanciful to think they will pay you £4,426 gross for a month and 4 days.

chrisbur's explanation of it being £,3077 gross is far more likely but only your employer can say for certain.

System

I always work mine out to an hourly rate so salary ÷ 52 then divide that by 37.5 which gives an hourly rate (think youre on about £16.41/hour). Then multiply the hourly by however many hours are in 4 days and use thesalarycalculator to get an expected pay with tax ni and pension deductions. I always find it quite accurate.

Mr.Saver

chrisbur wrote: »

No there are 25 working days between 25 Feb and 31 March (35 calendar days) so assuming 260 working days in the year ( far more likely to go for this than 253 the actual average number is nearer 261) you get £123.08 per day times 25 = £3077.00.
Though your employer might use a different method and come to a slightly different answer.
If this was processed as one pay period the NI would be £285.00
Strictly speaking as this payment covers two pay periods it should be done as a separate calculation for each pay period in this case coming out at something like £236.00. However if your employer decides to do it as one pay period probably not a good idea to make a fuss about it as a new starter.

Oops, my mistake, got the wrong number...

I'll edit my post to fix that.

Mr.Saver

muffinsugar wrote: »

Wow

thanks a lot for teh detailed reply. I shouldnt eb paying income tax this year as my earnings til date are 3300 (was on SMP).

However, because i just started a new job this month and didnt give a p45, (clicked B on the new starter checklist), it looks like im still going to get taxed on a Month1 basis, so hoping to recover that tax back at the end of the tax year.

£390 seems a lot for NIC , wow

Sorry, my bad. I made a mistake and took the calendar days as working days, so the previous calculation is wrong. Based on the new (in fact, the original before I edited my post for the first time) calculation, your maximum NIC is £299.76, not £390.

Mr.Saver

chrisbur wrote: »

No there are 25 working days between 25 Feb and 31 March (35 calendar days) so assuming 260 working days in the year ( far more likely to go for this than 253 the actual average number is nearer 261) you get £123.08 per day times 25 = £3077.00.
Though your employer might use a different method and come to a slightly different answer.
If this was processed as one pay period the NI would be £285.00
Strictly speaking as this payment covers two pay periods it should be done as a separate calculation for each pay period in this case coming out at something like £236.00. However if your employer decides to do it as one pay period probably not a good idea to make a fuss about it as a new starter.

Based on the rules set by HMRC, even the salary was for two payment periods, but they're counted as one if they are reported to HMRC for the same tax month. So the NIC will be higher than necessary in this case.

chrisbur

Mr.Saver wrote: »

Based on the rules set by HMRC, even the salary was for two payment periods, but they're counted as one if they are reported to HMRC for the same tax month. So the NIC will be higher than necessary in this case.

I am referring to the following section
3.1.5 Working out National Insurance contributions when you first pay an employee

which can be seen here
https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2017-to-2018-employer-further-guide-to-paye-and-nics#sec2

There are similar rules for mis-timed payments in the following section
3.2 Working out National Insurance contributions for employees not paid on their usual payday

These are the latest rules that I know of; have you a link to anything after this?

Mr.Saver

chrisbur wrote: »

I am referring to the following section
3.1.5 Working out National Insurance contributions when you first pay an employee

which can be seen here
https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2017-to-2018-employer-further-guide-to-paye-and-nics#sec2

There are similar rules for mis-timed payments in the following section
3.2 Working out National Insurance contributions for employees not paid on their usual payday

These are the latest rules that I know of; have you a link to anything after this?

I'm afraid the 3.2 rule doesn't apply here. Because the rule only applies "if you pay employees on a day other than their usual payday". OP will get paid on the usual payday in March, but won't get paid on the payday in Feb.

Although I indeed have missed rule 3.1.5 which only applies to an employee's first pay. Based on this rule OP's NIC will be calculated on the £2,666.67, not £3,199.9, therefore could save £64.

chrisbur

Mr.Saver wrote: »

I'm afraid the 3.2 rule doesn't apply here. Because the rule only applies "if you pay employees on a day other than their usual payday". OP will get paid on the usual payday in March, but won't get paid on the payday in Feb.

Although I indeed have missed rule 3.1.5 which only applies to an employee's first pay. Based on this rule OP's NIC will be calculated on the £2,666.67, not £3,199.9, therefore could save £64.

Yes it is the rule 3.1.5 that I was referring to that would apply to the OP I threw in the rule 3.2 as being similar but referring to situations that might occur after the first payday, though in this case you could say that for the OP the usual Feb payday has been moved to March. Both are rules often overlooked by employers when paying two or more pay periods together.

muffinsugar

Thanks a lot for all your detailed replies.

It has been really helpful