Take home pay query

Cypruseast

I am looking some advice if possible. My pay has been a little all over the place for the past 6 months as a result of changing my pension contributions and altering my salary sacrifice towards childcare vouchers. I need to get the families budget in place for the start of next month but based on my pay at the end of August which was very different to my end of July pay I have no idea what my take home pay is likely to be. I’ve also just seen online that HMRC owes me £1300 from an overpayment of taxes last year. So tbh it’s all a bit baffling and I’m v confused about what my take home should be.

Below I am going to set out example figures. I am hoping some of you experts could work out for me what my likely take home pay will be based on the scenario below. All figs are monthly:

Gross salary £5200
Pension contribution £500
Childcare voucher salary sacrifice £243
Gift Aid - £3 per month
Tax code - 1030L from 27th Aug (was 1026L from 27th July and 707L up until the 27th July - I assume this is why the refund is being offered) 
Deductions - £320/mth for company car and private health 

If anyone could help me I’d really appreciate it.

Many thanks in advance. 

Dazed_and_C0nfused

Any refund for the current tax year will be made by your employer (by using a new tax code).  You will not get the £1,300 by this method though.

You aren't usually taxed on "gross" salary.  It is taxable pay/salary which matters.  Are you able to confirm what your taxable pay will be at the end of September?

Not sure what relevance Gift Aid has, is this something you do via your employer?  Is it part of the make up of your tax code?

What do you mean by deductions?  

[Deleted User]

Hi,

you could play about with this gadget, put in figures from last payslip to give you an idea.

Cypruseast

Dazed_and_C0nfused said:

Any refund for the current tax year will be made by your employer (by using a new tax code).  You will not get the £1,300 by this method though.

You aren't usually taxed on "gross" salary.  It is taxable pay/salary which matters.  Are you able to confirm what your taxable pay will be at the end of September?

Not sure what relevance Gift Aid has, is this something you do via your employer?  Is it part of the make up of your tax code?

What do you mean by deductions?  

The overpayment is being sent to my bank account in a one off payment and is not being paid back via my tax code. 

In terms of the info I provided I offered up a gross monthly amount and I appreciate that there is a personal allowance up to £12.5k and beyond that things are taxed. 

I pay gift aid on various charity donations I make and this is considered an addition to my personal allowance alongside a % of my pension contributions. HMRC describes things like my company car and my private health insurance as deductions against my personal allowance and this is what creates the tax code. 

This is how it is described and presented on the HMRC website when someone goes on to check their tax code. 

getmore4less

I need to get the families budget in place for the start of next month

Should you not have this in place already so you know how much you need to take home to cover all the expenses going forward.

Then adjust the pay to meet those needs  distributing  the excess to things like discretionary spending  pensions savings etc.

Given the income there should be plenty to meet the day to day stuff and it will be the discretionary spends like going out and holidays that will take up the surplus.   

sheramber

The repayment lump sum is for last year and has no bearing on your current year figures.
Put your net taxable pay figure into the calculator linked to above and that will tell the take home figure to expect.
Your code number takes care of any adjustments to your personal allowances figure.

chrisbur

The Listen to taxman site which is often recommended will often but not always give you an answer that is near enough correct.  It has several limitations caused by the way it calculates everything.  There is only one tax calculator that uses the same method to calculate tax as the PAYE system used by your employer that is here....
http://payecalculator.hmrc.gov.uk/PAYE0.aspx
There is also an NI calculator here
https://www.gov.uk/government/collections/how-to-manually-check-your-payroll-calculations
These will give you exactly the same tax/NI figures that your employer will produce.

You do need to be careful using them and give all the details asked for so to check if you are using the correct figures I would recommend that you input the details from your last payslip, taxable gross, tax code/basis, date paid, and from your payslip before that the taxable gross to date and tax paid to date.  If you have the correct figures the tax will match to the penny the tax showing as deductions on your last payslip.
If that works you now know which figures to use so can then do the same for next month's taxable gross.
Similar for NI to get the NI.
 
EDIT  There is a line in the tax calculator "Previous tax not deducted due to regulatory limit"

you are unlikely to need this.  This would only apply if 50% of your taxable gross had been taken as tax in your last payment; if that did not happen you just need to put 0 in here.

Cypruseast

getmore4less said:

I need to get the families budget in place for the start of next month

Should you not have this in place already so you know how much you need to take home to cover all the expenses going forward.

Then adjust the pay to meet those needs  distributing  the excess to things like discretionary spending  pensions savings etc.

Given the income there should be plenty to meet the day to day stuff and it will be the discretionary spends like going out and holidays that will take up the surplus.   

Overall the budget is sorted and I run a pretty tight ship with billing accounts, personal spend accounts, a food budget, household savings and long term savings. My take home pay has fluctuated by £500 in the past couple of months so that’s why I’m asking the question as £500 makes a big difference when I am trying to create a fair and equitable level of financial input into the overall budget when my partner works part time and earns a lot less and when we have new childcare costs to take into consideration. Day to day expenses are easily covered it’s just the additional bits I’m trying to work out for savings and as I mention to ensure that both my partner and I have an equitable amount of discretionary spend. 

getmore4less

I would solve that problem by running with a buffer fund that has a few £k that gets topped up each month but has a few months worth of discretionary spending in it.

Decouple the income timing from the budget. 

kimwp

In theory if your income is variable by month it will be difficult to tell how much tax you will need to pay at the end of the year. Perhaps work out the tax assuming the lower income all year and also at the higher income all year and see if this affects the rate of tax. Hopefully they are the same in which case you just apply that rate to any extra. As far as I know: Salary sacrifice (which could apply to your pension depending on how your company does it) is deducted off the gross before NI and tax applied, pension AVCs before tax applied but not NI. Not sure about gift aid (I do payroll giving, which I think reduces tax but not NI) or car/private health deductions.

Personally, given that your day to day expenses are covered, I would live as though on the lower income, plonk the extra money into a savings account, then when the tax for that year is sorted, you have a nice lump sum to share between you.

Cypruseast

kimwp said:

In theory if your income is variable by month it will be difficult to tell how much tax you will need to pay at the end of the year. Perhaps work out the tax assuming the lower income all year and also at the higher income all year and see if this affects the rate of tax. Hopefully they are the same in which case you just apply that rate to any extra. As far as I know: Salary sacrifice (which could apply to your pension depending on how your company does it) is deducted off the gross before NI and tax applied, pension AVCs before tax applied but not NI. Not sure about gift aid (I do payroll giving, which I think reduces tax but not NI) or car/private health deductions.

Personally, given that your day to day expenses are covered, I would live as though on the lower income, plonk the extra money into a savings account, then when the tax for that year is sorted, you have a nice lump sum to share between you.

Sorry I should have been clear here. My gross monthly pay is exactly the same every month, it’s just that my actual net pay is the one that is different. I pulled together a spreadsheet to review it all and have given it to our accounts in work to review. But basically in the past 24months I have been on 7 different tax codes! My net pay has been different on 11 occasions in this period yet I’ve only made 3 changes myself - increasing Childcare care voucher contributions on two occasions and increasing my pension contribution back in Jan of this year. During these 24 months I’ve been on a emergency tax code for 17 of the 24 months. With all of those being an M1 code so lordy knows what’s being going on!!?? All a bit baffling but hopefully the accountants and payroll will work it out somehow...