PAYE- how does it work?

studentphil

How does PAYE work? If I have got it right your employer divides your expected tax over 12 months of the tax year rather than you loosing 22 per cent of your salary a month once you go over your 522L allowance.

Is that right or not?

Tojo_Ralph

The Pay As You Earn (PAYE) system is a method of paying income tax.

Your employer deducts tax from your wages or occupational pension before paying you your wages. Wages includes sick pay and maternity pay. This means that you pay tax over the whole year, each time you are paid. Your employer is responsible for sending the tax on to HM Revenue and Customs.

If you pay tax on your wages or occupational pension under PAYE, the PAYE system can also be used to collect the income tax of any other taxable income you have. For example, if you pay tax under PAYE on an occupational pension, the tax due on your state retirement pension is collected through PAYE by deducting tax from your occupational pension.

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astonsmummy

Google???
Or just as someone in payrol, Phil this is hardly a great topic for discussion is it :rolleyes:

studentphil

Tojo_Ralph wrote: »

Your Employer handles payment of taxes on your behalf ..... i.e. You Pay as You
The Pay As You Earn (PAYE) system is a method of paying income tax. Your taxpayer’s employer deducts tax from your wages or occupational pension before paying you your wages. Wages includes sick pay and maternity pay. This means that you pay tax over the whole year, each time you are paid. Your employer is responsible for sending the tax on to HM Revenue and Customs.


If you pay tax on your wages or occupational pension under PAYE, the PAYE system can also be used to collect the income tax of any other taxable income you have. For example, if you pay tax under PAYE on an occupational pension, the tax due on your state retirement pension is collected through PAYE by deducting tax from your occupational pension.


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Thanks, but that doesn't tell me how the system works.

I have googled it and that is the sort of thing that comes up that really doesn't answer my question.

There is a saving tax board but I don't want to save tax.

studentphil

astonsmummy wrote: »

Google???
Or just as someone in payrol, Phil this is hardly a great topic for discussion is it :rolleyes:

Before I ask someone at payroll I need to understand so I can ask the right question.

Mark7799

So what is your question????

Skint1

studentphil wrote: »

Before I ask someone at payroll I need to understand so I can ask the right question.

Just ask for your P.45

robby-01

Skint1 wrote: »

Just ask for your P.45

becareful phil astons mummy will start throwing insults in a moment

juno

I have a question, and I might as well do it here to make it a pointful thread.

I recently started my first job this tax year. My normal salary shouldn't take me over the £5000ish to start paying tax, so I'm currently not paying any. However, I'm doing a lot of overtime so I might go over that, and I'm intending to get a new better job soon anyway.
How is my tax going to be worked out? I'm scared that I'll soon "use up" all of my personal allowance and then will have to pay tax on all of it! Or should I just trust that they're doing it right?

studentphil

Mark7799 wrote: »

So what is your question????

It is, if I go over my personal allowance in Feb or March, am I going to have all those month's salary taxen in tax to cover my yearly tax bill?

chatta

Juno you have to work out if you will do enough overtime to justify paying tax on your personal allowance. Earning an extra pound is not worth going over the allowance but if you will be earning a lot more than it then its worth it in the long run.