Tax on a month with a bonus

alessandro

Hi

I need some help with my latest pay as I think the tax paid is wrong and I'm unsure if it is and what to do if so.

My base pay is 1992.38 and I got 215.96 due to a promotion and the pay difference between roles as well as 75.59 in back pay on the promotion. I also got 800 as a bonus on a referral with a salary sacrifice of my pension of 79.70 so my gross is 3004.23.

I paid 406.20 in income tax 274.23 in National Insurance
128 in a student loan and 9.33 for a workplace health plan.

My tax code is 1258L.

Any help appreciated 😊

Linton

Others can work out the numbers but a key point is that in most cases when you receive a one-off bonus PAYE effectively works on the assumption that you will get that increased pay every month for the rest of the tax year and so excessive tax is taken. In subsequent months when you dont get the bonus the tax will be reduced so that by the end of the year the total tax take should be correct.

greatkingrat

Looks about right. Even with the bonus you won't hit the 40% tax bracket so no reason you would have overpaid tax.

chrisbur

At first glance your NI and student loan are correct (assuming student loan is Plan 1)
Your tax does seem to be a little bit higher than I would expect so to see what is happening here can you give me from your payslip and also the payslip you received before this one the following details....
Taxable gross to date
Tax paid to date
Tax code and anything following it eg X 1 0 mth1 cumulative non-cumulative
Month number or date of payment.

Problem is that tax is not calculated on what you earn in a month but it is calculated on what you are due to pay for the tax year so far and from this is deducted what you have paid so far.

alessandro

Thanks for the help thus far.

I am paid the last day of every month. Last month was tax period 3 paid 28th June with 6273.20 as taxable and tax paid 625 tax code 1258L no other numbers. This month tax period 4 due to be paid tomorrow taxable gross 9352.98 tax paid 1031.20 same tax code.

chrisbur

alessandro wrote: »

Thanks for the help thus far.

I am paid the last day of every month. Last month was tax period 3 paid 28th June with 6273.20 as taxable and tax paid 625 tax code 1258L no other numbers. This month tax period 4 due to be paid tomorrow taxable gross 9352.98 tax paid 1031.20 same tax code.

If your taxable pay to date on this payslip is £9352.98 and on the last one it was £6273.20 then the taxable gross used for this payday is the difference which is £3079.78 You have paid tax on your pension of £79.70.
Your NI and student loan certainly appear to have been calculated on a gross of £3004.23 and I cannot think of any reason that would explain why your tax was not calculated on this figure as well. That after all is the point of salary sacrifice.

Has this been going on for long?

Regarding your original query is this aprox £15 extra tax the sort of figure that you felt it was wrong by or did you feel that it was more than this?

alessandro

This was my first pay with the extra promotion money though period 1 had a 600 bonus and 2 had a 400. I thought it was possibly more but my tax knowledge is severely limited.

zagfles

You're getting taxed on £75.55 more than getting NI'ed. This is usually because you've got some sort of payrolled benefit - do you get private medical insurance or something like that?

alessandro

Yeah I just joined the company health scheme. That came up as that amount

chrisbur

alessandro wrote: »

This was my first pay with the extra promotion money though period 1 had a 600 bonus and 2 had a 400. I thought it was possibly more but my tax knowledge is severely limited.

Had a feeling that was the case.
Although different in some respects tax NI and student loan all have one thing in common. You get an amount on which you pay nothing then you start to pay at a percentage of earnings over that figure. So any increase is deducted without an allowance for nil deduction.

If we take NI as an example each month you get £719 on which no NI is payable and after that you pay 12% (it does later go down but you have not earned enough for that)
So if you earn £1500 you get £1500 less £719 which is £781 and 12% of that is £93.72
Then you get a good month and earn £3000 so that's £3000 less £719 which is £2281 and 12% of that is £273.72
So doubling your wages very nearly triples your NI
Same for other deductions as your pay rises the deductions rise as a percentage of your pay.

chrisbur

alessandro wrote: »

Yeah I just joined the company health scheme. That came up as that amount

That does look to be the explanation for the extra little bit of tax.