Tax code error/update

noclaf

I started a new role earlier this year (during the current 22-23 tax year). My new employer used a standard tax code of 1257L on 4 months of payslips, it should of been 1461L and this has now been rectified for my next payslip.

 
I am now trying to understand how this will impact my tax allowance for the remainder of the 22-23 tax year.
 

14610-12570 = 2040 *4 months = 8160 
20% income tax on 8160 = 1632 overpayment of income tax.

Would the 1632 overpayment now be applied to my PAYE tax for each of the remaining  months in 22-23 tax year i.e: for Dec, Jan, Feb, Mar reduce PAYE tax by £408 (1632/4)?

I might be completely wrong so appreciate any pointers here pls.

Dazed_and_C0nfused

The first time your employer uses the new tax code your tax will be adjusted i.e. you will pay less to reflect getting the benefit of the extra allowances for the first 9 months of the tax year.

Using the information from your latest payslip, pay from any previous job in this tax year and expected taxable pay on the next payslip you can use this calculator to see what the impact will be.

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

But I have no idea where you're getting an overpayment of £1632 from?

Additional tax code allowances of £2,040 would result in an overpayment of £408 for a basic rate payer.  £34/month.

noclaf

Dazed_and_C0nfused said:

But I have no idea where you're getting an overpayment of £1632 from?

Additional tax code allowances of £2,040 would result in an overpayment of £408 for a basic rate payer.  £34/month.

Thanks D and C.
Just realised, I multiplied £2,040.00 by 4 months which is incorrect.
 It should be £408 / 12 months = £34 as you stated above.

noclaf

On a slightly different topic to OP, if I am a higher rate income tax payer and reduce my gross monthly pay by £140 for example (to sal sac this into pension instead) what is the actual reduction in take home pay?

40% tax + 2% NI = 42% total

so would my take home reduce by 58% of £140 = £81.20 reduction?

[Deleted User]

noclaf said:

On a slightly different topic to OP, if I am a higher rate income tax payer and reduce my gross monthly pay by £140 for example (to sal sac this into pension instead) what is the actual reduction in take home pay?

40% tax + 2% NI = 42% total

so would my take home reduce by 58% of £140 = £81.20 reduction?

That’s correct!