P60, tax and payslips

chrisbur

Savvy_Sue wrote: »

Another one to wonder that: having that on both jobs would give you a tax free allowance of nearly £26,000 per year, which is definitely not quite right!

The OP is not being given this tax allowance on both payslips so either a mistake giving the details or perhaps due to the way the employer is calculating tax. Just a guess but perhaps they work out tax on first payslip, then on sum of both payslips and deduct tax taken on first payslip to get tax for second payslip.
At the moment the really curious thing is the tax of £192.49 on second payslip; at this level of earnings I would always expect to see a tax figure exactly divisible by 20p.

flea72

chrisbur wrote: »

It looks like you have given gross to date not taxable gross to date.
Certainly tax for month 2 is looking Ok assuming your tax code is correct. Your allowance is all against the first payment and the second is at about basic rate, though the figure given is a bit out I would not expect to see an odd 9p on the end. With taxable gross to date figures can check exactly.
Is the tax code showing on payslip 2 definitely 1297L
Forgot to ask for NI figures to check them.

Taxable gross todate 2786.99 and 2045.84

Sorry yes a typo. 192.40, not 192.49

Tax code is the same on both payslips

NI 84.98 and 127.28 (on payslips). Or contributions todate 187.29 and 270.68

I pay pension at 7.1% and 9.3%

Thanks everyone for help so far

chrisbur

Have checked through these figures and can confirm that they are 100% correct for tax and NI. There are a couple of small points you might like to check up on but cover them at the end. The fact that the same tax code is quoted on both slips suggested to me that the method of calculation is to work out tax/NI figures for payslip 1, then to add payslip 1 and payslip 2 together to work out tax/NI figures and from these total figures deduct the figures for payslip 1 to get the figures for payslip 2. This is the advised method for NI and works for tax as well.
The following is the calculations based on this method
Tax
This is done on taxable gross, this way you do not pay tax on your pension contributions, known as the net pay arrangement.
Payslip 1 taxable gross to date 2786.99
Tax allowance for code of 1297L is 12979.08 for the year which is 2163.18 for month 2
The tax allowance has to cover a band of allowances from in this case £1297 up to £1299 so everybody gets the top allowance for PAYE which is then increased a little to make it divisible exactly by 12 (same for each month)
So 2786.99 less 2163.18 gives 623.81 on which tax is due at 20%
Tax at this point is only done on full pounds so 20% of 623 is £124.60
Adding payslip 1 and 2 together we have taxable gross of 2786.99+2045.84=4832.83
4832.83 less the tax allowance of 2163.18 is 2669.63
So 20% tax on 2669 is £533.80
Less the £124.60 paid on payslip 1 gives £409.20

Which is exactly the same tax paid to date as you would have paid if this had been the earnings for one job and everything on one payslip.

NI is a bit different as this is due on your gross not taxable gross, and is worked out month by month not on year to date figures.
You get £719 a month on which no NI is due and then pay at 12% on full figure no dropped pence this time.

So payslip 1
1427.19 less 719 = 708.19

12% of that is £84.98

Add payslip 1 and 2 together you get 2487.81 less 719 is 1768.81

12% of that is 212.26
less 84.98 paid on payslip 1 and you get £127.28

The sum of your two NI figures is exactly the same as you would have paid if this had been the earnings for one job and everything on one payslip.

Figures do look a bit funny when presented as two payslips but your tax NI are being calculated as if it was only one payslip and it is just the split where you seem to pay a lot on the smaller payslip that makes it look a bit strange; but they are spot on.

I notice that your tax code is not the standard tax code but just a little higher hopefully you know why this is, perhaps some expense you are able to claim for.

Comparing total gross with taxable gross for payslip 1 the pension difference looks a bit different to 7.1% Perhaps some small payment that is not pensionable?

flea72

Tax code Expenses - uniform washing and professional fees

Thank you so much. It all looks so much clearer now