Net pay differs from calculation

fidaa

I was given an increase in my salary to £83,530 in May. I take no pension and no other deductions bar tax and NI. I worked out I would earn a net of 4.8k but to my surprise I got 5k. Have I missed some tax aspect? Wondering how it came to 5k.

My entire £12570 PA was used up in April pay as I got a bonus of 15k gross + normal wage.

Dazed_and_C0nfused

It looks like you've misunderstood how PAYE works.

If you are paid monthly you will only get 1/12th of your tax code allowances in April.  And another 1/12th in May.  And so on.

You can use this calculator to check the tax deductions.

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

If your adjusted net income is going to exceed £100k you might want to update your expected earnings on your personal tax account to avoid building up an underpayment of tax.

It's unusual not to contribute to a pension, particularly as a higher rate payer.  You will be paying more tax than you need to and missing out on part of your remuneration if not contributing means no employer contributions as well.

fidaa

Dazed_and_C0nfused said:

It looks like you've misunderstood how PAYE works.

If you are paid monthly you will only get 1/12th of your tax code allowances in April.  And another 1/12th in May.  And so on.

You can use this calculator to check the tax deductions.

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

If your adjusted net income is going to exceed £100k you might want to update your expected earnings on your personal tax account to avoid building up an underpayment of tax.

It's unusual not to contribute to a pension, particularly as a higher rate payer.  You will be paying more tax than you need to and missing out on part of your remuneration if not contributing means no employer contributions as well.

Good point but my net pay each month has always been pretty much the same? Is it likely to stay at 4.8k each month then?

I did put away part of my bonus in april into pension to avoid going over 100k.

molerat

** Back of a fag packet calculation without exact figures** That bonus put you into 45% tax for the month but you get that back over May & June, hence the higher than expected take home, and drop to the expected £4.8k take home from July.

fidaa

molerat said:

** Back of a fag packet calculation without exact figures** That bonus put you into 45% tax for the month but you get that back over May & June, hence the higher than expected take home, and drop to the expected £4.8k take home from July.

ah ok so it is a set figure of 4.8k net in general though each month?

fidaa

Any confirmation?

chrisbur

Yes round about that once the adjustment of the 45% tax to 40% tax is finished.  Cannot say exactly when that will be on details given so far but will probably get a payment somewhere between the 4.8K and 5K as the last of the adjustment is made.

fidaa

chrisbur said:

Yes round about that once the adjustment of the 45% tax to 40% tax is finished.  Cannot say exactly when that will be on details given so far but will probably get a payment somewhere between the 4.8K and 5K as the last of the adjustment is made.

Thanks, I guess 4.8 will always be the minimum though right? Sorry we are planning some house renovations hence the questions!

fidaa

Sorry anyone confirm minimum amount please

Dazed_and_C0nfused

fidaa said:

Sorry anyone confirm minimum amount please

You can check it here yourself.

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

fidaa

chrisbur said:

Yes round about that once the adjustment of the 45% tax to 40% tax is finished.  Cannot say exactly when that will be on details given so far but will probably get a payment somewhere between the 4.8K and 5K as the last of the adjustment is made.

Got 5k again this month. I am guessing it may stay at that permanently