Tax Help

Tuharax

Hi,
I wondered if someone could help with a tax issue.


Pay: 35,000
One off bonus payment: 3968
Tax Code: 889L
Pension: 5%
Student Loan Plan 1

I received a bonus in April of 3968. However, this was missed from pay. My company therefore included it in Mays payslips. They however, did a one off transfer during May for the bonus and said it would be included as a deduction in our May payslip. On Mays payslip the total gross pay is 6884.67 which is correct bonus+normal gross pay. Tax is 1642, NI = 468, Pension = 96 student loan = 477 then there's a section 'already paid' = 2199 for the mid month bonus payment.

I have calculated how much I should have received using the Salary Calculator.It says during the bonus period my net should have been: £4,455.32. This is what we should have got in pay at the end of May if my company didn't do the one off transfer and just included the bonus in normal pay.

I received 2000 at the end of May (normal salary) and a mid month payment of 2199. Which equates to a total of 4199. This 250 short of what the Salary calculator is saying I should have received.

I am wondering if doing the mid month transfer has messed up tax some how, and I have paid more? Can anyone help me check this?

chrisbur

Best way to check your payslip is to give the full figures, most salary calculators can sometimes be unreliable. In this case the calculator may not be taking into account the 40% that will be deducted ( and later paid back )from part of the bonus as it is being paid early in the tax year.

From your payslip
Taxable gross
Tax paid
NI paid
Tax code
Month number or date paid
Student loan deduction
Taxable gross to date
Tax paid to date

Tuharax

Thanks


https://imgur.com/a/cL4Eopm

chrisbur

The tax figure is spot on for your earnings. You have paid some tax at 40% and assuming your earnings now continue at £2916.67 each month some of this 40% tax will be repaid to you each month as it is converted to 20% tax until all has been adjusted.

What figure did the calculator give for NI?

Tuharax

https://imgur.com/a/MLZY9SB

chrisbur

mjcloran wrote: »

https://imgur.com/a/MLZY9SB

The figure given here for tax appears to be done at 20% and using the standard tax code*. As I said as it is paid early in the tax year you have paid some tax at 40% which you will get recalculated to 20% assuming your earnings remain as they are and also your tax code is not standard.
If you do want to do a check anytime on tax the only reliable calculator to use is this one..
http://payecalculator.hmrc.gov.uk/Errors/SessionEnded.aspx

Edit
*On looking again the tax code used appears to be about 1053 no idea where that came from.

unholyangel

Where are the 2nd figures from? Just your use of taxable pay in the table is confusing....taxable pay should include your personal allowance. Because it is taxable - just @ 0% for however much your personal allowance permits.

Its due to apportioning. Your personal allowance to date for that period is 8899 (personal allowance)/12 (pay periods in the year) * 2 (pay periods to date) = 1483 (rounded anyway). Your basic rate band to date for that period is 6250 (37500/12*2)

Taxable pay in normal month is 2916.67. In bonus month was 6884.67. To date was 9801.34.

So, 9801 - 1483 = 8138 - 6250 (basic rate) = 2068 @ higher rate = 827.20 + (6250@20%) 1250 = 2077.20.

As months go on, you'll have more basic rate band become available.

chrisbur

unholyangel wrote: »

Where are the 2nd figures from? Just your use of taxable pay in the table is confusing....taxable pay should include your personal allowance. Because it is taxable - just @ 0% for however much your personal allowance permits.

Judging by the layout I would say it comes from here....
https://www.thesalarycalculator.co.uk/salary.php

Like many tax/Ni calculators it uses the phrase "taxable pay" to refer to the pay used to work out the tax due after the tax allowance has been deducted.
Even the official HMRC calculator refers to "Total taxable pay" for the figure after tax allowance has been deducted.