Take Home Pay

crazzzy

Hi all, over the last couple of years I have been fortunate enough to be earning enough to get in to the 40% tax band, but this year I decided to up my pension contributions to pull myself back out of the bracket.

My first paycheck does not match what I though the tax should be and after asking payroll they have given me figures which still show me in the higher rate bracket respite now having a lower gross after increasing my pension contributions. Can anyone understand why I still have some in higher bracket?

The screenshot shows my adjusted gross.

Much appreciated

S

Screenshot 2026-04-27 115405.png

crazzzy

Just to add my allowance was reduced this year to £10840, and the calculation attached was from an online calculator which has given the same figures as payroll but I just don't understand why

chrisbur

The reason is due to the reduction in your tax code.

You get £10840 tax free and then the 20% tax band of £37700 to give £48540 total before the 40% tax band starts.

What explanation were you given for this reduction?

crazzzy

I think is similar to what payroll have just got back to me with, so if I understand correctly, the upper limit isn't actually a fixed £50270 but the band is 37700 for 20%? so upper limit will change based on my allowance, cheeky ********'s!! (government that is not you 😂)

chrisbur

https://forums.moneysavingexpert.com/discussion/comment/81979089#Comment_81979089

When HMRC do a year end calculatiuon you will get the £12570 tax allowance and the £37700 20% tax allowance. Depending on the reason for the tax code adjustment there will then be an adjustment to your tax owed figure. The adjustment made to your tax code at the moment is an estimate of adjustment they will be making ( for example might be tax owed for last year) at the year end.

Do you know why they feel you owe extra tax that requires this adjustment?

crazzzy

I had the additional £1000 allowance from my wife, but then she started working and it took me a bit of time to update it, as I was lazy, so that's likely the reason for the different tax code an allowance. I had done all my calculations based on the upper limit being £50270 and not the range being £37700 so it make a bit more sense taking that in to account