Help calculating NetPay (Higher rate of tax 40%)

oatcakes

Hi,

Can someone please help me calculate what my net pay is going to be for the next few months before the beggining of the next tax year?

This is the first time I am going to be in an higher rate tax bracket and I am a bit confused how it all works..

I have ended up receiving multiple perfomance related bonuses this year which have boosted my gross anual earnings..

I could not find any calculator online that would calculate the entire year's month by month net pay taking into account the different tax brackets...

My normal monthly salary and deductions breakdown is:
Gross Salary: £4,116

TaxCode: 1257L

Deductions

PAYE: £679

NIC: £352

Employee Pension: £223
NetPay: £2,862

I just got paid today and noticed that my gross salary totals are approaching £50k..

30th December

Employee To-Date totals:

NIable Gross: £49,129

Taxable Gross: £49,129

Net pay will be: £2,862

27th January

Employee To-Date totals:

NIable Gross: £53,245

Taxable Gross: £53,245

NetPay: ???

24th February

Employee To-Date totals:

NIable Gross: £57,361

Taxable Gross: £57,361

NetPay: ???

26th March

Employee To-Date totals:

NIable Gross: £61,477

Taxable Gross: £61,477

NetPay: ???

Thank you in advance

liz_bartun

oatcakes said:

Hi,

Can someone please help me calculate what my net pay is going to be for the next few months before the beggining of the next tax year?

This is the first time I am going to be in an higher rate tax bracket and I am a bit confused how it all works..

I have ended up receiving multiple perfomance related bonuses this year which have boosted my gross anual earnings..

I could not find any calculator online that would calculate the entire year's month by month net pay taking into account the different tax brackets...

My normal monthly salary and deductions breakdown is:
Gross Salary: £4,116

TaxCode: 1257L

Deductions

PAYE: £679

NIC: £352

Employee Pension: £223
NetPay: £2,862

I just got paid today and noticed that my gross salary totals are approaching £50k..

2nd December

Employee To-Date totals:

NIable Gross: £49,129

Taxable Gross: £49,129

27th January

Employee To-Date totals:

NIable Gross: £53,245

Taxable Gross: £53,245

NetPay: ???

24th February

Employee To-Date totals:

NIable Gross: £57,361

Taxable Gross: £57,361

NetPay: ???

26th March

Employee To-Date totals:

NIable Gross: £61,477

Taxable Gross: £61,477

NetPay: ???

Thank you in advance

It looks like you're on salary sacrifice for pension? If that is the case those later taxable/niable figures you've quoted are wrong as you haven't deducted the pension contribution.

It looks like you're paid 4-weekly? So you'll also have a payday on 30th December.

What is your tax paid to date?

oatcakes

It’s a standard Auto Enrolment Company Pension, not salary sacrifice.

Yes, you’re correct, I am paid 4-weekly.
Typo. Instead of 2nd December, I meant 30th December.

PAYE to date: £9,300
NI to date: £3,627

Dazed_and_C0nfused

This calculator is very simple to use and works perfectly providing you do it one month at a time, starting with your most recent actual payslip.

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

Do you know what method is used to pay into the pension?

Net pay or relief at source?

chrisbur

As far as tax is concerned your pay figures given for normal pay indicate a taxable gross of £4116
The figures you then give for the following months also indicate a taxable gross of £4116 so your tax for those 4 week periods will be about the same as the £679 you give as normal tax.
May vary by pence and I would guess the figure you gave was a bit rounded.
Do you realise that on these earnings (assuming roughly even through the year) you have been paying some 40% tax all year.
Are you sure about the NI of £352 as this seems a bit out? EDIT Forget that I forgot about the last change when I did a quick calc   NI will remain the same as well 

chrisbur

oatcakes said:

It’s a standard Auto Enrolment Company Pension, not salary sacrifice.

As you have given taxable pay and NIable pay as same figures and not salary sacrifice this would indicate that you are in a Relief at source pension so can reclaim some tax as paying some at 40%
Details here
https://www.gov.uk/guidance/pension-administrators-reclaim-tax-relief-using-relief-at-source

liz_bartun

oatcakes said:

It’s a standard Auto Enrolment Company Pension, not salary sacrifice.

Yes, you’re correct, I am paid 4-weekly.
Typo. Instead of 2nd December, I meant 30th December.

PAYE to date: £9,300
NI to date: £3,627

Whoops! Yes, I can see now it's relief at source, my mistake. 

As has been said already, your net pay should continue at a very similar figure to the 2/12 pay for the rest of the tax year. 

chrisbur

chrisbur said:

As far as tax is concerned your pay figures given for normal pay indicate a taxable gross of £4116
The figures you then give for the following months also indicate a taxable gross of £4116 so your tax for those 4 week periods will be about the same as the £679 you give as normal tax.
May vary by pence and I would guess the figure you gave was a bit rounded.
Do you realise that on these earnings (assuming roughly even through the year) you have been paying some 40% tax all year.
Are you sure about the NI of £352 as this seems a bit out? EDIT Forget that I forgot about the last change when I did a quick calc   NI will remain the same as well 

Is there anything you are still unsure of?

penners324

There are apps that will do this for you as will the hmrc app

chrisbur

penners324 said:

There are apps that will do this for you as will the hmrc app

The OP would appear to have tried at least some apps to work out expected pay but I get the impression that they are not understanding how PAYE works.
Earlier they said....
"I just got paid today and noticed that my gross salary totals are approaching £50k."
I assume from this they are referring to the point where tax due rises from 20% to 40% (though that has increased a year or so ago to £50270) thinking that the rise to 40% would occur when their gross to date reached this point ie in the next month or so; not realising that some 40%  tax had been deducted probably from the beginning of the tax year so there would be no sudden jump at the £50270 point.
As the OP's quoted expected earnings are continuing at the same level so to will their net pay continue at the same level.

oatcakes

Hi,

Sorry I forgot about this post.
Yes, you're right chrisbur I wans't really sure how PAYE works.

I did not even realise that I was already being deducted some of the 40% since the beggining of the tax year.. I though this would only happen once my to-date totals reached £50,270 i.e. in January pay.