Income Tax/NI Calculations for Temp Workers

philg89

I was just wondering how your tax deductions are calculated on your paychecks every week/month if you're a temporary worker and don't have an annual salary? I know if you have a salary you deduct the personal allowance and then /12 to get the monthly income tax contribution, but how is this done if you don't know your annual income?

Thanks

csgohan4

https://www.gov.uk/estimate-income-tax

also many others apps and online calculators to use

philg89

I'd like to be able to make the calculations myself though rather than using a calculator. Or at least understand how the calculations are done.

Dazed_and_C0nfused

It's basically the same for everyone.

The crucial things you need to know are your tax code

NI category (usually A)

taxable pay (often less than a dual pay due to pension contributions)

what tax period the pay is for (often weekly or monthly but could be fortnightly or four weekly).

molerat

Rough and ready but not exact and assuming not a M1 tax code. Use the tax allowance allocated to that job and divide by 12 or 52.  Work out the total paid in that job year to date then the tax allowance multiplied by week or month number.  Deduct that from the total pay then work out the tax due on that amount, if you are a 20% tax payer then quite simple but if a 40% payer or live in Scotland then not so much. Deduct the tax paid so far and that will give you the tax due on that particular pay packet.  NI is worked out on each individual pay point. Not rocket science setting up a spreadsheet to get the exact calculations, all the data needed is available in various HMRC publications. Once you get to understand how the PAYE system works it all becomes clearer.

chrisbur

http://payecalculator.hmrc.gov.uk/PAYE0.aspx
http://nicecalculator.hmrc.gov.uk/Class1NICs1.aspx

These will give you the exact answers.