PAYE increased about £30 from last month

collinsca

[Deleted User] said:

collinsca said:

earlier in the year i was on 46,126.00
then got a payrise of 2998.00 around July 
to take it to 49,124.00

thank you

i will do the calculation posted by chrisbur over the next few days

There would have have been additional payments - perhaps a bonus since April? 

yes - i had a bonus of 4340 in june, period 3 and 1158L was the tax code at that point. 

[Deleted User]

collinsca said:

purdyoaten2 said:

collinsca said:

earlier in the year i was on 46,126.00
then got a payrise of 2998.00 around July 
to take it to 49,124.00

thank you

i will do the calculation posted by chrisbur over the next few days

There would have have been additional payments - perhaps a bonus since April? 

yes - i had a bonus of 4340 in june, period 3 and 1158L was the tax code at that point. 

That piece of information alters everything and, given earlier, could have made this thread a lot shorter. With that bonus, and your increased salary you are projected to pay tax at the higher rate of 40% this tax year. Your December salary was the first instance of that threshold being breached. 

chrisbur

If the salary figures given relate to the full tax year along with the bonus added in we appear to have the OP well into the 40% tax band at month 3 and staying in it for the rest of the tax year.  This would mean that there could be no moving into or out of the 40% tax band.  We need a month or two with little or no earnings, perhaps the OP was not employed from the start of the tax year.  Looking back at their posts I see the OP was concerned about redundancy towards the end of the last tax year from a job with earnings higher than the earnings given for early this tax year.  

Back to OP can you advise if you had any months this tax year with no or lower earnings.

[Deleted User]

chrisbur said:

If the salary figures given relate to the full tax year along with the bonus added in we appear to have the OP well into the 40% tax band at month 3 and staying in it for the rest of the tax year.  This would mean that there could be no moving into or out of the 40% tax band.  We need a month or two with little or no earnings, perhaps the OP was not employed from the start of the tax year.  Looking back at their posts I see the OP was concerned about redundancy towards the end of the last tax year from a job with earnings higher than the earnings given for early this tax year.  

Back to OP can you advise if you had any months this tax year with no or lower earnings.

I would normally happily bow to your obvious expertise and your theory on the position at month three onwards stands to reason.  However, in this instance, I now suspect that the figures quoted are for gross salary and not taxable salary which would bolster my argument in my previous post. Perhaps the op could confirm the taxable salary to date in November and December or, more helpfully, confirm any differences in gross salary and taxable salary on any payslip?

chrisbur

Yes good point on the pension but....
If we assume that the OP has enough pension deducted so that they have not earned enough to be in the 40% tax bracket then the gross pay they have advised going forward even without any pension deducted would mean that they never go into the 40% tax band.
If however they had enough pension to take them a little way into the 40% tax band then it would be possible to, over time, on their monthly taxable pay for this to be slowly converted from 40% to 20% so that they had a temporary reduction in tax which has now all or almost all run out so that the tax goes up in month 9 onwards. 

[Deleted User]

chrisbur said:

Yes good point on the pension but....
If we assume that the OP has enough pension deducted so that they have not earned enough to be in the 40% tax bracket then the gross pay they have advised going forward even without any pension deducted would mean that they never go into the 40% tax band.
If however they had enough pension to take them a little way into the 40% tax band then it would be possible to, over time, on their monthly taxable pay for this to be slowly converted from 40% to 20% so that they had a temporary reduction in tax which has now all or almost all run out so that the tax goes up in month 9 onwards. 

I share your assumptions in the second paragraph- we’ll see!

chrisbur

I did a couple of tests last night using a pension of 9% and 10% to reduce the gross and left the bonus with no pension reduction.
Both times the tax was the same ( within the expected variation PAYE produces) for several months up to month 8 and then jumped up for month 9.For 9% it went up about £6 and for 10% it was about £76 so obviously not quite the same as the £30 the OP had but I am fairly confidant that something along these lines happened. 

collinsca

I really hope this helps:

November:

Salary YTD 32,749.36

Taxable pay YTD 33,150.64

December:

Salary YTD 36,843.03

Taxable pay YTD 36,814.47

[Deleted User]

We are not being given the full picture here. In November the taxable pay to date is greater than the gross pay to date. In December the gross pay has increased by £4094 and the taxable pay by £3664 - 10.5% not taxable. 

Something missing - change in pension methodology?

chrisbur

collinsca said:

I really hope this helps:

November:

Salary YTD 32,749.36

Taxable pay YTD 33,150.64

December:

Salary YTD 36,843.03

Taxable pay YTD 36,814.47

Not sure if you have mistyped a figure somewhere as Nov taxable to date is higher than the salary and Dec taxable to date is lower than the salary, I would expect both taxable to date to be lower if only affected by pension, is there some sort of benefit being added on.
However assuming the taxable to date figures are correct then the November figure is over the 40% tax threshold and the December figure is under the 40% tax threshold.
This confirms that you went into the 40% tax band when you got the bonus and each payday after that you taxable pay was less than the amount that the 20% band went up by. 
The result was that some of your 40% tax was converted to 20% tax which lowered your tax for that month. 
By the December pay all tax you had paid at 40% had been adjusted back to 20% so the amount of adjustment was reduced.
This might take a couple of months to fully correct.  Your taxable pay went up by £3664 and the tax on that in the 20% band would normally be about £539 so it may not get to that figure until next month.