EYU needed, manual correction calculations

[Deleted User]

Kamsi said:

P60 figures/Tax code 469L		Sumbitted		Correction
Gross Taxable pay		88832.36		101763.36
Tax deducted		26753.2		28558.02
Earnings at LEL		6032		6032
Earnings above LEL to PT		2392		2392
Earnings above PT to UEL		37926		37926
Employee NI		5400		5895.27
Employer NI(treshold 8424)	13.80%	11096.35		12880.83
Net to Gross bonus amount paid in Dec 18 outside of payroll		12931		Net bonus amount	7500
Bonus to be added in 18/19

Tax and NI not correct here. Tax should be 31925.60. NI should be 5659.32. 

On the left (submitted) the net salary is 56679 (88832- tax 26753 - NI 5400)

On the right (correction) the net salary is 67310.07 (101763.36 - tax 28558.02 - NI 5895.27)

The difference is 10631.07, not 7500.

unholyangel

[Deleted User] said:

unholyangel said:

Kamsi said:

purdyoaten2 said:

Kamsi said:

Also the gross amount figure that you have used 12931 is the same amount which was actually put through payroll but in 19/20 tax year - why this is the same? Should this not be slightly different as tax code and threshold are different?

No - it should be exactly the same. The tax code is irrelevant. The bonus would be ALL be taxed at 40% in both years and the additional NI would ALL be at 2%. You do see that the employee utilised all his or her personal allowances once he/she earned 4699?

Yes I do. But I cannot understand why bonus amount which was put through payroll in Sept 19 (which is in the wrong tax year) is the same amount...£12931.02 to be exact?

Respectfully, I don't think you do see it or you wouldn't still be asking the question of why it's the same.

To slightly rephrase what purdyoaten2 has said, it is the same amount because the rate of NI and income tax due on it is the same for both years. In both years they would be liable to 2% NIC and 40% income tax. 

Furthermore, there may be other issues to consider. Them having to complete a self assessment (if they don't already) or having an underpayment due to loss of personal allowance, if the don't have other reliefs/deductions to reduce their income below the 100k threshold. Not really your issue if just payroll but might be worth giving them a heads up in any event. 

Yes - I would have mentioned that but wasn’t sure how 2019/20 ended up - given the reduction of 12931 in that year.

Yeah there's a few variables for both years which could affect the outcome and action needed. I tried to keep it succinct rather than go into details though.