UC Earning Taper Rate 55p Per £

Dave1UK

https://forums.moneysavingexpert.com/discussion/comment/81978595#Comment_81978595

I just spoke to my finance department and they sent over several screenshots and stating it is being reported correctly on their side. Unfortunately the screenshots aren't of much help to me at least.

Yamor

Just to add further:

Although this doesn't seem great, consider what would have been on the old tax credits and HB system:

Tax, NICs, student loan and pension: 41%

Tax credits taper: 41%

HB taper: 18.85%

Total: 100.85%

So you would have been worse off by working more!

Dave1UK

https://forums.moneysavingexpert.com/discussion/comment/81978602#Comment_81978602

Hmm that isn't much more if I go through the hassle of rectifying the pension reporting.

Seem counterproductive specifically when working with net figures and the combination of wages and UC payments. Unless you honestly are able to earn a substantial amount over the UC awarded amount i.e. (£841.65 in our case) it just doesn't make sense.

It definitely doesn't make sense to do any overtime at the expense of ones time, cutting into family time etc and work life balance for such a menial amount.

Yamor

Although rectifying the pension reporting only improves your take-home pay for a day of overtime by £3, the error is costing you much more than that each month already. It is costing you 55% of the entire pension deduction, so something in the region of £60 each month.

If your employer insists they are reporting it correctly, just raise it as an RTI dispute on your UC journal, and they will hopefully get it sorted for you.

huckster

The issue with the RTI process, is that if HMRC are required to be involved, the process falls down, when HMRC fail to gain any response from the employers.

So it is good advice to attack this in two ways. Directly with your companies payroll and with UC using the RTI process. Advise your employers that the UC RTI process involves HMRC contacting the employers about their reporting, so they may be keen to resolve.

Diaz09

Since others have covered the deduction basics, here's another angle - check if your overtime pushes you into a higher tax bracket or triggers student loan repayments that weren't applying before. Also worth considering that even though the immediate cash benefit feels small, you're still building up NI credits and pension contributions from the overtime hours, which have long-term value beyond the UC calculation.

Diaz09

Since others have covered the deduction basics, here's another angle - check if your overtime pushes you into a higher tax bracket or triggers student loan repayments that weren't applying before. Also worth considering that even though the immediate cash benefit feels small, you're still building up NI credits and pension contributions from the overtime hours, which have long-term value beyond the UC calculation.