Help with pay in lieu

JoeMartin33

Hi everyone,

I have recently changed to a new job. I finished in my previous job the 3rd of November, and they have included the 3 November days in my October´s payslip.

They have to pay me 3.8 days because these are annual leave days that I did not take before I leave (I have been working some hours during my annual leave in October and November). I included this in October´s timesheet that was sent after receiving the payslip.

They tell me that the payroll for my contract has now been completed, so in order to pay me 3.8 days (28.5 hours), they ask me for an invoice with an hourly net rate of £15.78 per hour (my gross salary was £42000).

I have two question, so I would be very glad if someone can help me with this.

1- Is the method proposed (invoice) ok? I'm afraid of doing something wrong with taxes and/or national insurance so I could be fined in the future.

2- Is the net rate payment ok? Specially regarding if I have to pay some taxes in the future.

Kind regards,
Joe

Sandtree

Invoice? 

Sounds like you werent an employee on PAYE? You werent going via an umbrella or such were you? 

JoeMartin33

Hi Sandtree, thank you for your answer. No I was not a contractor, I was a normal employee on PAYE. I think they have probably closed my PAYE account (if I can call it like this), so they ask me for the invoice.

Sandtree

I wouldnt send a net rate invoice when you were an employee via PAYE; would want a PAYE final pay to ensure P45/P60 etc are all correct and no risk of being considered "self employed" for any of it.

tizerbelle

No that hourly rate is wrong assuming you worked 37.5 hours a week it would be atound £21.54 an hour (they may have reduced it to account for tax) BUT whatever payment they give you would still be taxable. 

They can pay you through payroll.   We regularly make additional payments to PAYE leavers the month after they have left and we just run it through payroll the following month as an additional payment with a 0T tax code (so you are taxed 20%). 

tizerbelle

Here's the link you need for your payroll team if they insist that they can't pay you through payroll

https://www.gov.uk/employee-leaving

scroll down to the section called "Paying an employee after giving them a P45"

JoeMartin33

Thank you very much Sandtree and tizerbelle for your help. It is much appreciated.