Can anyone help with a payroll query?

[sniffysnifferson]

I've been lucky enough to receive a £1k bonus from work,I usually fall around the tax free bracket for my pay of around 920-980 per month. Some months a small amount of tax/ni is deducted.

I have just received my bonus and there is nearly 400 in deductions- is there a way I can find out if this is correct before I've a tit of myself with work?

Just to add, I was expecting there to be tax /ni payable, but it seems such a lot when the only difference is the bonus.

The bonus may have tipped you into paying tax

and sometimes they do take too much. What's your normal annual income

£400 on £1000 is way too much, though why this is I don't know

What exactly does your payslip say for the gross wage and the deductions?

Assuming your employer uses a computer payroll it won't have worked it out wrongly unless they have put the wrong amount in or your tax code is wrong Are those things correct?

Payroll software will calculate the monthly personal allowance you can have before tax. If you have a bonus it usually throws the calculation out because it assumes you’ll be earning the higher amount every month until the end of the tax year so you pay a lot of tax in the month when you receive the bonus, but next month when you get paid the normal amount you should get a repayment (ie you should have tax added back in next month). The NI calculation is done on a monthly basis though, so you won’t get that back via the payroll. Your accounts people should be able to check and explain the figures.

What Finzi said. When I've had a large bonus, it's taken up to 6 months to get the tax back through lower tax amounts. So your next few months salary will be higher than normal.

As others have said, the tax calculation will assume this is your new monthly salary.
You should get a tax rebate in the next pay packets - although it may take til April to sort fully.

So the software will give you £6,285 before tax for April - September (= 12,570/12 x 6). Then it looks at how much you’ve earned in the tax year so far. It will tax you at 20% at anything earned up to the end of September over £6,285.

Exactly what @finzi said. This will only happen if you are on a cumulative tax code though. If you not you will have to contact HMRC to Amend your tax code. Work in Payroll. We have had quite a few of these recently

Nothing to add to what Finzi & Crispy have said. Tax is cumulative bt national insurance isn't.

And NI is 12% of earnings between £797 and £4,189 a month. Hope that helps you make sense of the figures.

Thank you.

Tax & NI are recalculated on each wage slip
If we average your £920 to £980 as £950 per month, then in 6 months from April to September you would normaly earn £5700
But with the £1000 bonus that has become £6700 so far

Your tax and NI deductions are recalculated that having £6700 you should pay x
You have already paid y tax & NI so far and that gets deducted from the new total
Your £1000 bonus takes the hit today, especially if you were below threshold in normal months

In upcoming months you will either pay less deductions, or get a rebate when each calculation comes to a lesser amount owed for the income so far

Your £950 average has just jumped to £1116
But at the end of 12 months would be an average of £1033

You’ll either get slightly higher pay for the next few months or much higher pay next month. It’s because the calculations assume you’ll earn your normal pay plus the bonus every month.