Can anyone explain this payslip? 😳

[IsolaRossa]

My fiancé started a new job on 12th July. He was previously on £30,500; and has gone up to £38,000. He does now have a bit of a commute.

In July he was paid £1899.95, with £171.40 paid in tax and £141.71 in NIC, and then £76.00 for his pension, so he received £1510.84. He was on a M1/W1 tax code then, which has now been corrected.

In August he was paid £3166.67, with £425 tax, £292.72 in NIC and £126.66 in pensions removed, meaning he has ended up with £2321.29. He doesn't have a student loan or anything to repay.

The new job is quite a commute, so before he changed, he met with an accountant to run through whether it was worth it - it seemed it would be. Now once he takes his petrol costs out, he's making less than he was with his lower-paid but local job, and he's pretty down.

Does this look right to anyone in the know? I just can't get my head around it today.

I think his pension contribution might be being deducted after tax. If that is the case, he will need to claim back the extra tax from HMRC (through Self Assessment).
I've just put it into a tax calculator, and he should be paying £425 in income tax if he had no pension contributions, but only £400 once pension contributions are taken into account.

It will take a little while for his salary to settle down due to emergency tax, the change in salary and working whole/part months. But a monthly take home of £2321 is in the right ballpark for that salary.

However, I don't understand why you'd need to talk to an accountant to decide whether it is worth the extra petrol costs when changing jobs? That's something you just have to decide for yourself if the extra time and cost is worth it, balanced against the benefits of higher salary, possiblities for progression, better T&Cs, more interesting work, nicer workmates etc etc.

Money saving expert has an income calculator and that take home pay seems about right if pension is taken after tax. Basically all you had to do was look at the difference between the old salary and the new one (approx £300 per month) and see if the cost of commuting is more or less than the difference.

Pension is taken before tax, not after and any employer with half a brain will know this.

No-one can say whether the pension is before or after tax from the amounts stated as the OP hasn't said what the percentage of salary the employee contribution for that pension scheme is.

If you enter the gross salary in to a payslip calculator you get £2,448, minus the pension of £127 comes to £2,321.

Money Advice Service has a workplace pension calculator which suggests the monthly contribution should be £132.77.

The payslip calculator suggests that (excluding any pension contribution) his salary in his old job should have been £2,023, so effectively an increase of £425 per month on the salary alone. His old pension should have been around £101 per month.

That suggests that he should be earning approximately £399 per month extra than he was before. How far is his new job? I do 45 miles per day and my fuel bill is only around £35 per week.

Was he paying in to a workplace pension before?

Well, pension can be taken after tax if it's via salary deduction (not salary sacrifice) and then the pension provider reclaims a further 20% from HMRC and adds it to your pension fund. So it could be correct if that's how the employer processes their pension contributions.

OP, is the tax code correct now? The tax and NI look very low in the July payslip even allowing for working a part-month, so extra may have been charged in August; it should adjust next month but the August figures don't look far off what I'd expect TBH.

What do you think is wrong with it?

FWIW I earn the same, my deductions are the same except I also have student loan. I take home 2243.

Assuming standard tax free allowance and pension contributions of 4% (based on your figures) it does look right. He should be earning about £400 more per month than previously. How much have his petrol costs increased by?