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PAYE- how does it work?

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Comments

  • jaffa30
    jaffa30 Posts: 19,263 Forumite
    Part of the Furniture Combo Breaker Photogenic
    Skint1 wrote: »
    Just ask for your P.45 :D


    He might not need to ask , he might get it when he goes back:D
    R.I.P Sam, still in my heart
  • Skint1
    Skint1 Posts: 1,362 Forumite
    Phil when you started this job was it 2 weeks in hand or 1 in arrears ? :eek:
    You can always get more with a kind word and a 2-by-4 than with just a kind word.
  • Madjock
    Madjock Posts: 744 Forumite
    Tax is cumulative. Your employer will use tables that calculate how much tax you should have paid by whatever week or month of the year you are currently at.

    So, you may indeed find that you pay a hefty chunk of tax for a couple of months till the new tax year. The tax allowance is spread over 12 months or 52 weeks so normally you would pay the same amount each week or month (without allowing for overtime or bonuses).

    If you've worked say from April to September and paid tax then stop earning for the remainder of the tax year, then you will probably be entitled to a refund.

    Cumulative tax codes presume that you will earn whatever your salary is over a whole tax year. This is why it is important when you move jobs to get your P45 to your new employer asap so they know how much you've earnt and how much tax you've paid, otherwise they have to assume that you haven't paid any tax all year and you won't get any allowance applied to your pay before they deduct tax.

    sorry if this sounds confusing, i understand PAYE, but it's not necessarily easy to explain.
  • Morglin
    Morglin Posts: 15,925 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    studentphil wrote: »
    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?

    Does this mean you have found gainful employment, then?

    Lin ;)
    You can tell a lot about a woman by her hands..........for instance, if they are placed around your throat, she's probably slightly upset. ;)
  • chatta
    chatta Posts: 3,392 Forumite
    1,000 Posts Combo Breaker
    Morglin wrote: »
    Does this mean you have found gainful employment, then?

    Lin ;)


    Where have you been !!!! SP is a librarian now ;) Trouble is he can't find a book on taxation there so still needs advice here :D
  • Morglin
    Morglin Posts: 15,925 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Oh, is he?

    I must have missed that bit.......................glad to see he finally made it.:T :T :T

    Lin ;)
    You can tell a lot about a woman by her hands..........for instance, if they are placed around your throat, she's probably slightly upset. ;)
  • chatta
    chatta Posts: 3,392 Forumite
    1,000 Posts Combo Breaker
    studentphil wrote: »
    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?

    Phil have you paid any tax yet ???
  • studentphil
    studentphil Posts: 37,640 Forumite
    Morglin wrote: »
    Does this mean you have found gainful employment, then?

    Lin ;)

    I have had this job since the Summer, it is PT, but if it is gainful I dunno.
    :beer:
  • studentphil
    studentphil Posts: 37,640 Forumite
    chatta wrote: »
    Phil have you paid any tax yet ???

    No, I have worked it out that I will go about 2000 pounds over my allowance by Apr. So I will have used up my tax allowance by roughly Feb or March, so I am a bit worried that I will loose 200 pound in tax from one of my monthly payments.
    :beer:
  • chatta
    chatta Posts: 3,392 Forumite
    1,000 Posts Combo Breaker
    I think you will then, it has to be paid one way or another x
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