Paid 1 months in arrears, which tax year is it in?

boxrick

Im payed 1 month in arrears... so basically when i started my job, i worked a month and wasnt paid for the first month, then i received my first months wage at the end of my second month.

So now rather than being paid for the month ive just worked, im being paid for the month previous to that.... Which sucks but there is nothing i can do about it.

Recently i just got paid my march wage, yet because of the stupid way im paid it has started in the new tax year. I dont earn much, last year i had a total earning of around £4100 well under the ~£5000 income tax limit.

However this year i will go over, now i will go over by an additional £400 because of the fact of my march wage being paid a month late.

Am i entitled to that wage to be in the previous tax year?
How would i go about sorting this out?

I realise it isnt lots but its enough for me to be annoyed about and try and get it sorted....

dzug

I don't think you can do anything about it, sorry.

Tax is due when the wage is actually paid, not when it is earned.

CarolynH

Unfortunately, no. Wages are taxable in the period they are PAID, regardless of when they relate to.

boxrick wrote: »

So now rather than being paid for the month ive just worked, im being paid for the month previous to that.... Which sucks but there is nothing i can do about it.

Without meaning to sound patronising, are you sure about this? Our company pays 'monthly in arrears' which just means that people are paid for the month at the end of the month (i.e. after they have worked it - the alternative would be 'monthly in advance' which would be being paid before doing the work, which makes no sense). But we get paid on the last day of the month for work done for that month.

A lot of people interpret our 'monthly in arrears' as being paid in July for June, which isn't correct. Which is why I ask.

boxrick

Yep i am certain about this.... i worked for a month expecting a wage at the end of my first month ( was actually a month and 3 days or something .... )

I didnt recieve a penny... after enquiring more i was told that i would be paid at the end of the next month, for the first month i worked.... ( A joke really... )

So effectively they have a months wage tied up which i cannot do anything about until i quit.....

CarolynH

boxrick wrote: »

after enquiring more i was told that i would be paid at the end of the next month, for the first month i worked.... ( A joke really... )

So effectively they have a months wage tied up which i cannot do anything about until i quit.....

Yeah, that's exceptionally harsh. Have they every explained why?

shaznstubs

CarolynH wrote: »

Unfortunately, no. Wages are taxable in the period they are PAID, regardless of when they relate to.



Without meaning to sound patronising, are you sure about this? Our company pays 'monthly in arrears' which just means that people are paid for the month at the end of the month (i.e. after they have worked it - the alternative would be 'monthly in advance' which would be being paid before doing the work, which makes no sense). But we get paid on the last day of the month for work done for that month.

A lot of people interpret our 'monthly in arrears' as being paid in July for June, which isn't correct. Which is why I ask.

now i am confused,my other half has finally got his start date for the prison service,i have just been reading all his stuff and it states that he will be paid 1 month in arrears,i really hope hes not got to work 2 months before being paid,my 4 kiddies will be starving lol,not to mention paying the rent and all other bills,damn i wish we had savings tut :O( x

Richard019

boxrick wrote: »

However this year i will go over, now i will go over by an additional £400 because of the fact of my march wage being paid a month late.

If that's how it actually is then unless you're planning on changing job then you won't be.

This tax year you will be taxed for March 08 (paid April 08) - February 09 (paid March 09). In order to be paying extra you would need to be getting paid 13 months wages. (I realise there's the initial loss but that would be recouped if you stayed with them)

I assume through cost of living rises that in March 09 you'll earn more than you did in March 08, so in effect you'll be paying less tax this year than your earnt wages would dictate.

I'm not quite sure how to word it clearly, but due to personal tax allowances going up each April and having a month paid at a lower rate of pay it means that by getting paid that way you would end up paying less tax year on year, than if you got paid at the end of the month for that month. I know it works that way as my normal time is paid that month but my overtime is paid a month late, I've not worked out how much of a difference in earnings needs to be involved for the tax saving to be offset by the loss of interest in the bank.

Having said all that, I think the other posters are probably right in saying that it actually means you get paid at the end of the month for the month in question.