Income Tax Calculator widly differ for Pension and Tax values compared to actual payslip - why?

McBainUK

I have provided the MSE Income Tax calculator with my salary, pension contribution % and tax code.

However, comparing the calculator results to the wage slip some of the values are widly different:

• Pension is approx £500 higher than the wage slip
• Pension HMRC is approx £400 higher than the wage slip
• Tax paid is approx £600 higher than the wage slip

I understand the calculator is a "only ready reckoner" but what is so special about my inputs/situation...? My worry is that the calculator is correct, it's my wage slip that is wrong!

EDIT: details added below

eskbanker

McBainUK said:

what is so special about my inputs/situation...? 

You tell us!  Without the detail about your actual taxable income, tax code, tax deducted, and all other relevant information on your payslips, nobody can pinpoint the source of any discrepancies, although it's unusual for generic calculators to be more accurate than payslips produced from decent quality payroll systems....

Hoenir

McBainUK said:

 My worry is that the calculator is correct, it's my wage slip that is wrong!

Payroll systems are all approved by the HMRC. 

molerat

The tax calculators are generally pretty accurate, the usual problem is the quality of the input data

McBainUK

eskbanker said:

McBainUK said:

what is so special about my inputs/situation...? 

You tell us!  Without the detail about your actual taxable income, tax code, tax deducted, and all other relevant information on your payslips, nobody can pinpoint the source of any discrepancies, although it's unusual for generic calculators to be more accurate than payslips produced from decent quality payroll systems....

Fair point. Here's the details which seemed relevent:

* Inputs to MSE Tax Calculator *

Gross (pre-tax) income: 70,000

Tax Year: 2024/25

Age: Under 66

Pension contribution: 29%

Tax code: 1278L

Student loan: none

* Results, compared to April 2024 payslip *

(Monthly)	Calculated	Actual
Gross Wage	£5,833.00	£5,833.33
National Insurance	£284.00	£284.17
Pension	£1,692.00	£1,165.28 (NEST)
Pension HMRC	£664.00	£263.80
Take Home Pay	£3,242.00	£3,215.49
Tax Free Allowance	£1,066.00	-
Tax Paid	£615.00	£1,278.46
Taxable Wage	£3,076.00	-

[Deleted User]

McBainUK said:

eskbanker said:

McBainUK said:

what is so special about my inputs/situation...? 

You tell us!  Without the detail about your actual taxable income, tax code, tax deducted, and all other relevant information on your payslips, nobody can pinpoint the source of any discrepancies, although it's unusual for generic calculators to be more accurate than payslips produced from decent quality payroll systems....

Fair point. Here's the details which seemed relevent:

* Inputs to MSE Tax Calculator *

Gross (pre-tax) income: 70,000

Tax Year: 2024/25

Age: Under 66

Pension contribution: 29%

Tax code: 1278L

Student loan: none

* Results, compared to April 2024 payslip *

(Monthly)	Calculated	Actual
Gross Wage	£5,833.00	£5,833.33
National Insurance	£284.00	£284.17
Pension	£1,692.00	£1,165.28 (NEST)
Pension HMRC	£664.00	£263.80
Take Home Pay	£3,242.00	£3,215.49
Tax Free Allowance	£1,066.00	-
Tax Paid	£615.00	£1,278.46
Taxable Wage	£3,076.00	-

Nest contributions are not deducted from gross pay even if the contribution is based on gross pay. 

With your entries you have reduced your taxable pay by £1692 pension contribution which is totally incorrect. 

McBainUK

[Deleted User] said:

McBainUK said:

eskbanker said:

McBainUK said:

what is so special about my inputs/situation...? 

You tell us!  Without the detail about your actual taxable income, tax code, tax deducted, and all other relevant information on your payslips, nobody can pinpoint the source of any discrepancies, although it's unusual for generic calculators to be more accurate than payslips produced from decent quality payroll systems....

Fair point. Here's the details which seemed relevent:

* Inputs to MSE Tax Calculator *

Gross (pre-tax) income: 70,000

Tax Year: 2024/25

Age: Under 66

Pension contribution: 29%

Tax code: 1278L

Student loan: none

* Results, compared to April 2024 payslip *

(Monthly)	Calculated	Actual
Gross Wage	£5,833.00	£5,833.33
National Insurance	£284.00	£284.17
Pension	£1,692.00	£1,165.28 (NEST)
Pension HMRC	£664.00	£263.80
Take Home Pay	£3,242.00	£3,215.49
Tax Free Allowance	£1,066.00	-
Tax Paid	£615.00	£1,278.46
Taxable Wage	£3,076.00	-

Nest contributions are not deducted from gross pay even if the contribution is based on gross pay. 

With your entries you have reduced your taxable pay by £1692 pension contribution which is totally incorrect. 

Thanks for the pointer. Looking at the help of the calculator, it states that it won’t be accurate for pensions which use relief at source.

This answers the question why the numbers are different.

[Deleted User]

McBainUK said:

[Deleted User] said:

McBainUK said:

eskbanker said:

McBainUK said:

what is so special about my inputs/situation...? 

You tell us!  Without the detail about your actual taxable income, tax code, tax deducted, and all other relevant information on your payslips, nobody can pinpoint the source of any discrepancies, although it's unusual for generic calculators to be more accurate than payslips produced from decent quality payroll systems....

Fair point. Here's the details which seemed relevent:

* Inputs to MSE Tax Calculator *

Gross (pre-tax) income: 70,000

Tax Year: 2024/25

Age: Under 66

Pension contribution: 29%

Tax code: 1278L

Student loan: none

* Results, compared to April 2024 payslip *

(Monthly)	Calculated	Actual
Gross Wage	£5,833.00	£5,833.33
National Insurance	£284.00	£284.17
Pension	£1,692.00	£1,165.28 (NEST)
Pension HMRC	£664.00	£263.80
Take Home Pay	£3,242.00	£3,215.49
Tax Free Allowance	£1,066.00	-
Tax Paid	£615.00	£1,278.46
Taxable Wage	£3,076.00	-

Nest contributions are not deducted from gross pay even if the contribution is based on gross pay. 

With your entries you have reduced your taxable pay by £1692 pension contribution which is totally incorrect. 

Thanks for the pointer. Looking at the help of the calculator, it states that it won’t be accurate for pensions which use relief at source.

This answers the question why the numbers are different.

Remove the pension from the calculation. Calculate the net pay and then deduct the pension contribution as it appears on your payslip to calculate your take home.

chrisbur

I see that the calculator has now been improved but still a bit misleading regarding pensions.  It would be better if the fact that it only works for pension deductions under the net pay arrangement was more obvious rather than you have to click on the little question mark to find this information.  Also the figure given in the column "Pension HMRC" I feel is a bit misleading, there is no extra money from HMRC the amount in here is included in the pension figure deducted from your wages.  For example if you paid £500 in pension through the net pay arrangement then £500 goes into your pension but your tax is £100 lower than if you had not paid the £500 into your pension, and so your take home pay is only reduced by £400.