PAYE, NI TAX Calculation explanation

mazibee

Hi All,

Please can someone explain me how these values of PAYE , NI and pension are are calculated.

TAX Code 1257L

NI Standard Rate contribution A

4 weekly Gross Salary = £2,076.92

Pay Period  = 30 Apr 23 - 27 May 23

PAYE = £130.00

NI = £125.52
Employee Pension = £63.88
Employer Pension  = £63.88
Net Salary =£1757.52
Thanks in advance.

Dazed_and_C0nfused

As you are on a cumulative tax code you need the previous payslip details to know why the tax is £130.

And what method is used for the pension contribution?  Net pay, RAS or salary sacrifice?

NI suggests probably salary sacrifice.

[Deleted User]

What is the date of payment as opposed to the pay period, particularly as 27th May was a Saturday?

mazibee

purdyoaten2 said:

What is the date of payment as opposed to the pay period, particularly as 27th May was a Saturday?

Pay Date is 02-06-2023

mazibee said:

Hi All,

Please can someone explain me how these values of PAYE , NI and pension are are calculated.

TAX Code 1257L

NI Standard Rate contribution A

4 weekly Gross Salary = £2,076.92

Pay Period  = 30 Apr 23 - 27 May 23

PAYE = £130.00

NI = £125.52
Employee Pension = £63.88
Employer Pension  = £63.88
Net Salary =£1757.52
Thanks in advance.

Tax Basis is Cumulative on the current  Payslip

On the previous Payslip  the Tax code is1257L and is also cumulative

I have atatched the screen shot of Last period Payslip - no PAYE/NI was deducted

Employee pension was £9.46 on the last payslip, Gross was £775.71

Hope its helps

molerat

That tax deducted is around correct - I make it £135 - for £2852.63 at week 9, the totals of £2076.92 + £775.71.  NI looks rightish for that 4 week period.  The earlier slip did not reach the 4 week NI threshold. The question is where does the YTD of £1540.76 come from on that earlier slip ?

Dazed_and_C0nfused

4 weekly pay, week 1, 5 and 9?

[Deleted User]

Dazed_and_C0nfused said:

4 weekly pay, week 1, 5 and 9?

Yes - that’s why I asked for the payment date. Presumably 8th April, 6th May and 2nd June. 

chrisbur

Assuming that the figures given for last payslip are taxable gross and the salary figure has had the pension deducted for tax/NI and date of payment was after 31st May then for tax....
2076.92 less pension of 63.88 gives 2013.04
Add on taxable to date from last payslip so 2013.04 plus 1540.76 gives 3553.82
Deduct tax allowance for week 12 (third 4 weekly payment) of 2903.04 gives 650.78
Tax is due on full pounds only so ignore the pence and 20% of 650 is £130
NI allowance for weekly is 968 so four weekly gives 968 
So 2013.04 less 968 is 1045.04 and 12% of that is £125.40  
Close but not quite must be missing something will have to look at that again but certainly not far out.

EDIT  Just to add that tax will be higher (aprox £209 assuming same gross) next payday as this payday is reduced by unused allowance from earlier two paydays.

chrisbur

Dazed_and_C0nfused said:

4 weekly pay, week 1, 5 and 9?

Anyone on four weekly pay is paid using allowances for weeks 4/8/12/16 etc so they end on week 52 (or 56 occasionally)

chrisbur

Having tried the £2013.04 figure in the HMRC NI calculator here....
http://nicecalculator.hmrc.gov.uk/Class1NICs1.aspx
I get £125.52 the same as the OPs payroll is giving, so tried some other figures.
Weekly paid  £242    Earnings above threshold £0  NI due £0
Two weekly paid £484  Earnings above threshold £0  NI due £0
Four weekly paid £968  Earnings above threshold £1  NI due £0.12

Weekly paid £300  Earnings above threshold £58  NI due £6.96
Two weekly paid £600  Earnings above threshold £116  NI due £13.92
Four weekly paid £1200  Earnings above threshold £233  NI due £27.96
Still the extra £1 above the threshold and the extra 12p on the NI.

The only explanation I can think of is that the figures are based on the annual figure £12570  and then rounded up to the next pound.
So weekly as 1/52 is 241.73  gives 242
Two weekly 2/52 is 483.46 gives 484
Four weekly 4/52 is 966.92 so 967   (Not the 968 one would expect from 4 times the weekly figure)
Monthly 1/12 is 1047.50 so 1048

mazibee

Thanks everyone for the replies.

Please find below the screen shot of the summary of the last 3 payslips Hope it clears the things


I will be extremely thankful if someone explain:
a) NI calcuation in Finance Period 1 & 2
b) PAYE & NI Calculation in Period 3

c) What are the 4 weely allowances for PAYE and NI

Sorry for bothering and thanks again.